(2)
| Mr. Miñarro Viseras when he joined the Companyis based in 2016,Europe and we entered into a new employment agreement with himcompensated in October 2018 in connection with our competitive review of executive officer compensation. Full descriptionsEuros. Regardless of the material termsprevailing exchange rate in effect at the actual time of payment, for consistency with the employment agreements we entered into with Mr. Miñarro Viseras andvalues reported in the offer letters we entered into with Messrs. Reynal, Schiesl, and Weatherred are presented below in “―Narrative Disclosure to Summary“Summary Compensation Table, and Grants” all values have been converted to U.S. dollars at an exchange rate of Plan-Based Awards in 2021.”TABLE OF CONTENTS
Summary Compensation Table
The following table provides summary information concerning compensation1.1491, which was the five-year average exchange rate as of our NEOs for services rendered to us during the years indicated.
Vicente Reynal, Chairman, President and Chief Executive Officer | | | 2021 | | | 1,000,000 | | | ― | | | 5,024,967 | | | 1,674,995 | | | 2,730,000 | | | 183,524 | | | 10,613,486 | | 2020 | | | 861,358 | | | 843,150 | | | 6,699,947 | | | 1,674,996 | | | 1,500,000 | | | 561,723 | | | 12,141,175 | | 2019 | | | 823,988 | | | ― | | | 2,175,009 | | | 2,175,003 | | | 269,808 | | | 91,703 | | | 5,535,511 |
| | | | | | | | | | | | | | | | | | | | | | | | | Vikram Kini, Senior Vice President, Chief Financial Officer | | | 2021 | | | 487,500 | | | 122,455 | | | 824,952 | | | 274,995 | | | 773,500 | | | 119,806 | | | 2,603,208 | | 2020 | | | 340,562 | | | 247,455 | | | 849,930 | | | 249,994 | | | 286,475 | | | 46,886 | | | 2,021,301 |
| | | | | | | | | | | | | | | | | | | | | | | | | Andrew Schiesl, SVP, General Counsel, Chief Compliance Officer and Secretary | | | 2021 | | | 500,000 | | | ― | | | 712,461 | | | 237,486 | | | 682,500 | | | 63,103 | | | 2,195,550 | | 2020 | | | 437,083 | | | 375,000 | | | 949,973 | | | 237,493 | | | 375,000 | | | 1,026,939 | | | 3,401,488 | | 2019 | | | 460,000 | | | ― | | | 362,497 | | | 362,497 | | | 110,400 | | | 40,921 | | | 1,336,315 |
| | | | | | | | | | | | | | | | | | | | | | | | | Enrique Miñarro Viseras, SVP & GM, Industrial Technologies and Services, EMEIA and Pressure and Vacuum Solutions Group(6) | | | 2021 | | | 481,304 | | | ― | | | 824,952 | | | 274,995 | | | 538,123 | | | 78,026 | | | 2,197,401 | | 2020 | | | 396,782 | | | 388,430 | | | 999,995 | | | 249,998 | | | 393,863 | | | 89,626 | | | 2,518,695 | | 2019 | | | 369,803 | | | ― | | | 249,996 | | | 250,004 | | | 237,163 | | | 234,140 | | | 1,341,105 |
| | | | | | | | | | | | | | | | | | | | | | | | | Michael Weatherred, SVP, IR Execution Excellence (IRX), Strategy & Business Development | | | 2021 | | | 415,000 | | | ― | | | 524,945 | | | 174,989 | | | 566,475 | | | 39,811 | | | 1,721,220 | | 2020 | | | 357,796 | | | 311,000 | | | 699,975 | | | 174,999 | | | 311,250 | | | 86,799 | | | 1,941,818 |
(1)
| Reflects the salary amounts earned by our NEOs in the years indicated. In light of the uncertainty of the impacts of the COVID-19 pandemic at the time, each of our NEOs’ base salaries were reduced by 15% from April 1, 2020 through December 31, 2020. The details of changes in unadjusted salary rates from 2020 to 2021 is provided under “Compensation Discussion and Analysis - 2021 Executive Compensation Program in Detail - Base Salary”. |
(2)
| Amounts shown for 2020 reflect one-time bonuses made in recognition of extraordinary efforts related to the merger and integration as discussed in last year’s proxy statement. In addition, with respect to Mr. Kini, the amount shown for 2021 reflects the portion of a retention and relocation bonus earned in 2021 that was awarded to him in 2019 to encourage him to relocate to the Charlotte area after the Merger. |
(3)
| Represents the aggregate grant date fair value of the awards computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation - Stock Compensation (“FASB ASC Topic 718”), using the assumptions discussed in Note 16: “Stock-Based Compensation Plans” of the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021. |
(4)
| Amounts shown for 2021 reflect amounts earned under our 2021 MIP.Long-Term Equity Incentive Awards Annual PSU, RSU and Stock Option Awards Our long-term incentive awards, established through our 2017 Omnibus Incentive Plan, are intended to drive executives to deliver strong stock performance, align our executives’ compensation with long-term value creation, and to attract and retain highly-qualified executives. The details of these awards are as follows: • | 50% in Performance Share Units (PSUs). The PSUs have a 3-year performance period that runs from January 1, 2022 through December 31, 2024 (the “Performance Period”) with the vesting of award based on Relative TSR vs. S&P 500 Industrials as follows: |
○ | Threshold Performance: 35th percentile ranking vs. index = 50% payout |
○ | Target Performance: 55th percentile ranking vs. index = 100% payout |
○ | Superior Performance: 75th (or greater) percentile ranking vs. index = 200% payout (capped) |
(5)
| Amounts reported under All Other Compensation for 2021 reflect the following:To ensure better alignment of payouts with stockholder value creation, even if relative performance would have resulted in a payout above target, the payout under the PSUs is capped at target if the Company’s absolute TSR is negative. TSR is calculated as the appreciation in the price per share of a company’s common stock during the Performance Period (assuming any dividends or distributions are reinvested), expressed as a percentage. Relative TSR is based on the percentile rank of the Company’s TSR against the TSRs of the companies and entities that, on January 1, 2022, comprised the S&P 500 Industrials.13 • | 25% in Time-Vesting Restricted Stock Units (RSUs). RSUs vest in equal, annual installments over a four-year period. |
Vicente Reynal | | | 150,006 | | | ― | | | ― | | | 1,193 | | | 32,325 | | | ― | | | 183,524 | Vikram Kini | | | 43,945 | | | 51,599 | | | 23,725 | | | 537 | | | ― | | | ― | | | 119,806 | Andrew Schiesl | | | 52,506 | | | ― | | | ― | | | 597 | | | 10,000 | | | ― | | | 63,103 | Enrique Miñarro Viseras | | | ― | | | ― | | | 18,208 | | | 1,103 | | | 18,381 | | | 40,333 | | | 78,026 | Michael Weatherred | | | 29,316 | | | ― | | | ― | | | 495 | | | 10,000 | | | ― | | | 39,811 |
(a)
| Reflects Company matching contributions in the tax-qualified 401(k) Plan and the non-tax-qualified Supplemental Contribution Plan.• | 25% in Time-Vesting Stock Options. Stock Options vest in equal, annual installments over a four-year period, and expire 10 years from the grant date. |
(b)
| For Mr. Kini, reflects a tax equalization payment with respect to relocation payments. For Mr. Miñarro Viseras, value reflects a tax gross-up relating to reimbursement of school fees. |
(c)
| Reflects actual Company expenditures for use, including business use, of a Company car, including expenditures for the car lease and gas, and reimbursement of school fees for Mr. Miñarro Viseras' children. |
(6)
| Mr. Miñarro Viseras is based in Europe and compensated in Euros. We converted his 2021 cash compensation, his amounts earned under our 2021 MIP, and amounts shown in the “All Other Compensation” column for him to U.S. dollars at an exchange rate of 1.1357, which was the 5-year average exchange rate as of December 31, 2020. |
Total target values for annual equity awards granted in 2022 for each NEO are shown below: Vicente Reynal | | | $3,500,000 | | | $1,750,000 | | | $1,750,000 | Vikram Kini | | | $700,000 | | | $350,000 | | | $350,000 | Enrique Miñarro Viseras | | | $587,500 | | | $293,750 | | | $293,750 | Andrew Schiesl | | | $550,000 | | | $275,000 | | | $275,000 | Michael Weatherred | | | $425,000 | | | $212,500 | | | $212,500 |
Target annual equity award values were determined based on our competitive market analysis and our compensation philosophy, which calibrates award levels between market median and 75th percentile. The awards do not vest until the vesting criteria and/or time periods are satisfied and actual value realized by executives is dependent on the stock price at the time of vesting thereby aligning payouts with the change in stockholder value. TABLE OF CONTENTS These grant amounts were translated into a target number of performance share units, restricted stock units and stock options by taking such dollar amount and dividing it by the per share or per option “fair value” that was used for reporting the compensation expense associated with the grant under applicable accounting guidance. This “fair value” was based in part on the per share closing price of our common stock on the NYSE on the date of grant. CEO Performance-Based Leadership Equity Incentive Award For a detailed discussion of the terms and conditions of the Performance-Based Award, please see “Compensation Discussion and Analysis – Executive Summary – Performance-Based Leadership Equity Incentive Award & New CEO Employment Agreement” above and “Compensation Discussion and Analysis – Treatment of Outstanding Equity Awards in the Event of Termination of Employment or Change in Control” below. 2023 Compensation Actions 2020-2022 PSU Award Certified in 2023 On February 13, 2023, the Compensation Committee certified that the TSR performance for the 2020-2022 performance period was 55%, which placed the Company in the 78th percentile of S&P 500 companies (which was the comparator group for TSR measurement approved at the time of grant), resulting in a maximum payout of 200% of target. The PSUs resulting from this performance vested on February 13, 2023 with respect to each NEO as shown below: Vicente Reynal | | | 120,546 | | | 200% | | | 241,092 | Vikram Kini | | | 17,864 | | | 200% | | | 35,728 | Enrique Miñarro Viseras | | | 17,992 | | | 200% | | | 35,984 | Andrew Schiesl | | | 17,092 | | | 200% | | | 34,184 | Michael Weatherred | | | 12,594 | | | 200% | | | 25,188 |
MIP Design Change For the year 2023, we made two changes to our MIP performance metrics. First, for corporate managers (including our corporate NEOs) we moved from Adjusted EBITDA as a metric (75% of total MIP opportunity for corporate managers) to adjusted earnings per share (“Adjusted EPS”). Adjusted EBITDA remained the earnings metric for business unit managers (including Mr. Miñarro Viseras). Second, the Net Working Capital Percent of Revenue metric (25% of the total MIP opportunity for all participating managers) was replaced with Free Cash Flow for corporate managers (including or corporate NEOs) and was replaced with “Business Operating Cash Flow” for business unit managers (including Mr. Miñarro Viseras). “Business Operating Cash Flow” is defined as Adjusted EBITDA less change in Net Working Capital less Capex. We believe these changes to our MIP better incentivize the activities by our managers that drive long-term shareholder value creation and better align our executives’ focus with those of our stockholders. New Miñarro Viseras Employment Agreement In connection with the change in his role to senior vice president & general manager, Global Precision and Science Technologies, in April 2023, we entered into a new employment agreement with Mr. Miñarro Viseras, effective April 3, 2023 (the “New Miñarro Viseras Employment Agreement”). The material terms of the New Miñarro Viseras Employment Agreement are described under “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards in 2022—Summary of NEO Offer Letters and Employment Agreements—Employment Agreements with Mr. Miñarro Viseras” below. CEO Performance-Conditioned Stock Options Certified in 2023 For fiscal year 2022, the Company achieved adjusted EPS (as defined in the Performance-Based Award) growth of more than 12% over such adjusted EPS in 2021. As a result, in February 2023 the Compensation Committee certified that the first tranche of the CEO’s performance-conditioned stock options had been earned, and on February 23, 2023, Mr. Reynal was awarded stock options to purchase 100,000 shares. These stock options cliff-vest on February 22, 2028, creating significant retention value. TABLE OF CONTENTS The Decision-Making Process The Compensation Committee oversees the executive compensation program for our NEOs. The Compensation Committee works closely with its independent consultant and management to examine the effectiveness of the Company’s executive compensation program throughout the year. For additional information regarding the Compensation Committee, see “The Board of Directors and Certain Governance Matters―Board Committees and Meetings―Compensation Committee.” The Role of the Compensation Committee. The Compensation Committee ensures that the executive compensation program supports the Company’s business goals and aligns with stockholder interests. The Compensation Committee annually reviews NEO compensation levels by considering various factors, including: The relative importance of each NEO’s role and responsibilities How the NEO has performed relative to these roles and responsibilities Compensation practices of Peer Group companies (as defined below) Overall company performance Retention and succession considerations The Role of Management. Our CEO makes recommendations to the Compensation Committee regarding compensation for the executive officers other than himself. No member of management participates in discussions with the Compensation Committee regarding his or her own compensation. The Role of the Independent Consultant. The Compensation Committee has retained Pearl Meyer & Partners, LLC (“Pearl Meyer”), a compensation consulting firm, to assist it in evaluating the elements and levels of our executive compensation, including base salaries, annual cash incentive awards and equity-based incentives for our executive officers. In April 2023, the Compensation Committee determined that Pearl Meyer is independent from management and that Pearl Meyer’s work has not raised any conflicts of interest. Pearl Meyer reports directly to the Compensation Committee and the Compensation Committee has the sole authority to approve Pearl Meyer’s compensation and may terminate the relationship at any time. During 2022, the Compensation Committee directed Pearl Meyer to provide its expertise and analysis on a variety of topics, including competitive market assessment for executive and non-employee director compensation levels, compensation peer group review, review of governance matters pertaining to executive and employee compensation, the structure of short- and long-term incentive programs, and the development of Mr. Reynal’s Performance-Based Award. Peer Group. The Compensation Committee believes it is important to understand current trends in compensation practices and pay levels for companies that are comparable to Ingersoll Rand. To assist the Compensation Committee in this analysis, the Compensation Committee, together with its independent consultant and input from management, develops a compensation Peer Group of comparable companies against which it performs benchmarking (the “Peer Group”). The Compensation Committee, together with its independent compensation consultant and input from management, developed a compensation Peer Group of 13 companies. Companies chosen are comparable in revenue and enterprise value to the Company, as the Compensation Committee believes revenue and enterprise value are key determinants of compensation levels. Companies selected generally have revenue of 0.5x - 2x of Ingersoll Rand’s revenue and enterprise value. In addition to size, companies are in comparable industries where we compete for executive talent. After taking these considerations into account, the Compensation Committee decided to use the following Peer Group to help set compensation levels for 2022: | AMETEK, Inc. | | | Avery Dennison Corporation | | | Celanese Corporation | | | Dover Corporation | | | Flowserve Corporation | | | Fortive Corporation | | | IDEX Corporation | | | Mettler-Toledo International, Inc. | | | Oshkosh Corporation | | | Parker-Hannifin Corporation | | | Pentair Plc | | | Rockwell Automation, Inc. | | | Xylem, Inc. | | | | | | | |
The Compensation Committee does not rely solely on data from the Peer Group in establishing compensation levels and practices, but uses it to support the implementation of the Company’s compensation TABLE OF CONTENTS philosophy and the application of the factors described above when setting executive compensation. Given the Company’s focus on delivering long-term value creation for our stockholders, the Compensation Committee generally targets cash compensation of the NEOs at or below the median of the Peer Group and long-term equity incentive compensation greater than the 50th percentile of the Peer Group. Additionally, the Compensation Committee may also consider survey compensation data based on companies of similar size to Ingersoll Rand. In 2022, during its annual review of the Peer Group, the Compensation Committee, using similar criteria as to what is highlighted above, adopted the following 12 company Peer Group for 2023 compensation actions: | AMETEK, Inc. | | | Dover Corporation | | | Flowserve Corporation | | | Fortive Corporation | | | IDEX Corporation | | | Illinois Tool Works* | | | Mettler-Toledo International, Inc. | | | Nordson Corporation* | | | Parker-Hannifin Corporation | | | Pentair Plc | | | Rockwell Automation, Inc. | | | Xylem, Inc. | |
*
| Added to the Peer Group in 2022. Avery Dennison Corporation, Celanese Corporation, and Oshkosh Corporation were removed. |
Other Compensation Practices and Policies that Align Our NEOs to Our Stockholders Stock Ownership and Retention Policy To align the interests of our management and directors with those of our long-term stockholders, the Board of Directors concluded that certain of our executives (the “Covered Executives”) and non-employee directors should have a significant financial stake in the Company’s stock. To further that goal, we implemented market-leading stock ownership guidelines (the “Guidelines”) in 2017, the year we completed our initial public offering. The Covered Executives and non-employee directors are required to hold a specific level of equity ownership as outlined below. Covered Executives: The Guidelines apply to the Covered Executives in three tiers. The stock ownership levels under the Guidelines, expressed as a multiple of the Covered Executive’s annual base salary rate as of January 1st of the year, are as follows: Tier One | | | Chief Executive Officer | | | 10x Salary | Tier Two | | | Chief Financial Officer and General Counsel | | | 5x Salary | Tier Three | | | P&L and Corporate Leaders | | | 3x Salary |
Retention Requirement: There is no required time period within which a Covered Executive must attain the applicable stock ownership level under the Guidelines. However, until the applicable ownership level is achieved, Covered Executives must retain 75% of net shares granted to them. Once the ownership guideline is met, Covered Executives must retain 30% of net shares granted to them. This requirement drops to 20% for a Covered Executive upon the earlier of a (1) such Covered Executive reaching the age of 55 and (2) such covered executive achieving 10 years of service with the Company. The requirement terminates upon the earlier of (1) such Covered Executive reaching the age of 60 and (2) such covered executive achieving 15 years of service with the Company. The shares counted toward these ownership requirements include shares owned outright and vested stock options. The retention requirement applies to all prior and future grants. These ownership requirements are set at levels that the Company believes are robust given the Covered Executives’ respective salaries and responsibilities. Non-Employee Directors: Our non-employee directors are required to hold 75% of net shares granted to them under our benefit plans until they own equity equal to five times their annual cash retainers. Once the ownership guideline is met, directors must retain 30% of the net shares granted to them under our benefit plans until their retirement. As of January 1, 2023, all of our NEOs and then serving directors who were with the Company for at least one year were in compliance with the applicable stock ownership requirements under the Guidelines. TABLE OF CONTENTS Hedging and Pledging Policies The Company’s Securities Trading Policy requires executive officers and directors to consult the Company’s General Counsel prior to engaging in transactions involving the Company’s securities. The Company’s Securities Trading Policy prohibits directors and executive officers from hedging or monetization transactions including, but not limited to, through the use of financial instruments such as exchange funds, variable forward contracts, equity swaps, puts, calls, and other derivative instruments, or through the establishment of a short position in the Company’s securities. The Company’s Securities Trading Policy limits the pledging of Company securities to those situations approved by the Company’s General Counsel. Incentive Compensation Clawback Policy We have adopted a clawback policy for incentive compensation. The Compensation Committee determined that it may be appropriate to recover annual and/or long-term incentive compensation in specified situations. Under the policy, if the Compensation Committee determines that incentive compensation of its current and former Section 16 officers (or any other employee designated by the Board or the Compensation Committee) was overpaid, in whole or in part, as a result of a restatement of the reported financial results of the Company or any of its segments due to material non-compliance with financial reporting requirements (unless due to a change in accounting policy or applicable law), then the Compensation Committee will determine, in its discretion, whether to seek to recover or cancel any overpayment of incentive compensation paid or awarded during the three-year period preceding the date on which the Company is required to prepare the restatement. While our compensation philosophy is to focus on performance-based forms of compensation while providing only minimal executive benefits and perquisites, we provide to all our employees, including our NEOs, broad-based employee benefits that are intended to attract and retain employees while providing them with retirement and health and welfare security. These include: a 401(k) savings plan; medical, dental, vision, life and disability insurance coverage; and dependent care and healthcare flexible spending accounts. 401(k) Plan Our U.S. eligible employees, including our NEOs other than Mr. Miñarro Viseras, participate in the Ingersoll Rand Retirement Savings Plan (the “401(k) plan”), which is a tax-qualified retirement savings plan. Eligible employees hired on and after January 1, 2014, are automatically enrolled in the 401(k) plan to make pre-tax salary contributions, unless they decline participation. Under the 401(k) plan, we match 100% of the first 6% of a participant’s eligible pre-tax and/or Roth salary contributions, subject to all IRS annual limits and plan limitations. Participants are 100% vested in employee salary contributions and Company matching contributions. 401(k) plan participants may elect to contribute up to 85% of their annual eligible compensation (either through pre-tax or Roth contributions), subject to annual IRS and plan limitations. Supplemental Defined Contribution Plan In addition to the 401(k) plan, U.S. employees with a salary band of 8 or higher (generally senior directors and above), including the NEOs other than Mr. Miñarro Viseras, are eligible to participate in the Ingersoll Rand Supplemental Defined Contribution Plan (the “Supplemental Contribution Plan”), which is funded through a Rabbi Trust. This Supplemental Contribution Plan is intended to permit Company matching contributions on eligible participant compensation contributions to the Supplemental Contribution Plan in excess of the annual limitations imposed by the IRS on our tax-qualified 401(k) plan. Eligible employees may contribute up to 50% of their salary and/or eligible annual bonus compensation to the Supplemental Contribution Plan. Under the Supplemental Contribution Plan, after an eligible employee exceeds the annual IRS pre-tax/Roth contribution limits and the annual catch up contribution limit for participants age 50 and older or compensation limit under the 401(k) plan, we match 100% of the first 6% of a TABLE OF CONTENTS participant’s further eligible contributions to the Supplemental Contribution Plan. Company matching contributions under the Supplemental Contribution Plan are contributed to the Rabbi Trust in the form of cash rather than our common stock. All employee and Company matching contributions under the Supplemental Contribution Plan are fully vested immediately. Limited Perquisites Executive perquisites are not part of our general compensation philosophy; however, we provide limited perquisites and personal benefits that are not generally available to all employees when necessary to attract top talent. For instance, beginning in 2021, certain of our senior executives, including each of the NEOs, are eligible for a tax and financial planning benefit, under which participating executives are reimbursed for qualified services (up to $10,000 per year) and participation in our executive physical program. In addition, from time to time, we may set forth additional perquisites in offer letters or employment agreements we enter into with our executive officers. These arrangements are discussed under “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards in 2022—Summary of NEO Offer Letters and Employment Agreements.” For example, in 2022, per their respective employment agreements, Mr. Reynal was entitled to limited personal use of Company-leased aircraft, and Mr. Miñarro Viseras was entitled to use of a company car. Severance and Change in Control Agreements The Company believes that reasonable and appropriate severance and change in control benefits are necessary in order to be competitive in the Company’s executive attraction and retention efforts. As discussed below, the offer letters we enter into with our NEOs provide for certain payments, rights and benefits to the NEOs upon an involuntary termination of employment without “cause” or a termination by the NEO for “good reason” (as such terms are defined in “Potential Payments to Named Executive Officers Upon Termination of Employment or Change in Control-Severance Arrangements and Restrictive Covenants” below). In addition, our equity award agreements provide for accelerated vesting upon a change in control in certain circumstances and upon certain qualifying terminations of employment, as more fully described above under “―Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards in 2022―Terms of Equity Awards.” Risk Management and Mitigation of Compensation Policies and Practices The Compensation Committee has reviewed our incentive compensation programs, discussed the concept of risk as it relates to our compensation program, considered various mitigating factors, and reviewed these items with its independent consultant, Pearl Meyer. In addition, the Compensation Committee asked Pearl Meyer to conduct an independent risk assessment of our executive and other compensation programs. Based on these reviews and discussions, the Compensation Committee does not believe our compensation program creates risks that are reasonably likely to have a material adverse effect on our business. For the foregoing reasons, the Compensation Committee has concluded that the programs by which our executives are compensated strike an appropriate balance between short-term and long-term compensation and incentivize our executives to act in a manner that prudently manages enterprise risk. We entered into offer letters setting forth initial compensation and benefits, as well as severance terms, with Messrs. Reynal, Schiesl and Weatherred at the time of their initial employment. In addition, we entered into an employment agreement with Mr. Miñarro Viseras in October 2018 in connection with our competitive review of executive officer compensation. As previously noted, we entered into a new employment agreement with Mr. Reynal in September 2022. We also entered into a new employment agreement with Mr. Miñarro Viseras effective April 3, 2023 (the “New Miñarro Viseras Employment Agreement”). Full descriptions of the material terms of the employment agreement with Messrs. Reynal, the employment agreement with Mr. Miñarro Viseras in effect on December 31, 2022 and the New Miñarro Viseras Employment Agreement, and the offer letters with Messrs. Schiesl and Weatherred are presented below in “―Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards in 2022.” TABLE OF CONTENTS Summary Compensation Table The following table provides summary information concerning compensation of our NEOs for services rendered to us during the years indicated. Vicente Reynal, Chairman, President and Chief Executive Officer | | | 2022 | | | 1,075,000 | | | ― | | | 49,547,938 | | | 1,749,996 | | | 1,963,500 | | | 169,523 | | | 54,505,957 | | 2021 | | | 1,000,000 | | | ― | | | 5,779,046 | | | 1,674,995 | | | 2,730,000 | | | 183,524 | | | 11,367,565 | | 2020 | | | 861,358 | | | 843,150 | | | 6,932,600 | | | 1,674,996 | | | 1,500,000 | | | 561,723 | | | 12,373,829 | Vikram Kini, SVP and Chief Financial Officer | | | 2022 | | | 518,750 | | | ― | | | 1,185,766 | | | 349,991 | | | 531,038 | | | 90,115 | | | 2,675,660 | | 2021 | | | 487,500 | | | 122,455 | | | 948,750 | | | 274,995 | | | 773,500 | | | 119,806 | | | 2,727,006 | | 2020 | | | 340,562 | | | 247,455 | | | 880,887 | | | 249,994 | | | 286,475 | | | 46,886 | | | 2,052,258 | Enrique Miñarro Viseras, SVP and GM, Global Precision and Science Technologies(7) | | | 2022 | | | 502,885 | | | ― | | | 995,221 | | | 293,747 | | | 408,458 | | | 30,414 | | | 2,230,725 | | 2021 | | | 481,304 | | | ― | | | 948,750 | | | 274,995 | | | 538,123 | | | 78,026 | | | 2,321,198 | | 2020 | | | 396,782 | | | 388,430 | | | 1,034,720 | | | 249,998 | | | 393,863 | | | 89,626 | | | 2,553,419 | Andrew Schiesl, SVP, General Counsel, Chief Compliance Officer and Secretary | | | 2022 | | | 500,000 | | | ― | | | 931,610 | | | 274,985 | | | 446,250 | | | 108,427 | | | 2,261,272 | | 2021 | | | 500,000 | | | ― | | | 819,380 | | | 237,486 | | | 682,500 | | | 63,103 | | | 2,302,469 | | 2020 | | | 437,083 | | | 375,000 | | | 982,961 | | | 237,493 | | | 375,000 | | | 1,026,939 | | | 3,434,476 | Michael Weatherred, SVP, IR Execution Excellence (IRX) and Business Excellence | | | 2022 | | | 426,250 | | | ― | | | 719,903 | | | 212,488 | | | 383,775 | | | 83,983 | | | 1,826,399 | | 2021 | | | 415,000 | | | ― | | | 603,721 | | | 174,989 | | | 566,475 | | | 39,811 | | | 1,799,996 | | 2020 | | | 357,796 | | | 311,000 | | | 724,281 | | | 174,999 | | | 311,250 | | | 86,799 | | | 1,966,125 |
(1)
| Reflects the salary amounts earned by our NEOs in the years indicated. |
(2)
| Amounts shown for 2020 reflect one-time bonuses made in recognition of extraordinary efforts related to the Merger and integration as discussed in last year’s proxy statement. In addition, with respect to Mr. Kini, the amount shown for 2021 reflects the portion of a retention and relocation bonus earned in 2021Vicente Reynal | | | | | | | | | $187,500 | | | $1,500,000 | | | $3,000,000 | | | | | | | | | | | | | | | | | | | | | | | 2/23/21 | | | 2/18/21 | | | | | | | | | | | | 36,749 | | | 73,497 | | | 146,994 | | | | | | | | | | | | 3,349,993 | | 2/23/21 | | | 2/18/21 | | | | | | | | | | | | | | | | | | | | | 36,748 | | | | | | | | | 1,674,974 | | 2/23/21 | | | 2/18/21 | | | | | | | | | | | | | | | | | | | | | | | | 93,107 | | | $45.58 | | | 1,674,995 | Vikram Kini | | | | | | | | | $53,125 | | | $425,000 | | | $850,000 | | | | | | | | | | | | | | | | | | | | | | | 2/23/21 | | | 2/18/21 | | | | | | | | | | | | 6,033 | | | 12,066 | | | 24,132 | | | | | | | | | | | | 549,968 | | 2/23/21 | | | 2/18/21 | | | | | | | | | | | | | | | | | | | | | 6,033 | | | | | | | | | 274,984 | | 2/23/21 | | | 2/18/21 | | | | | | | | | | | | | | | | | | | | | | | | 15,286 | | | $45.58 | | | 274,995 | Andrew Schiesl | | | | | | | | | $46,875 | | | $375,000 | | | $750,000 | | | | | | | | | | | | | | | | | | | | | | | 2/23/21 | | | 2/18/21 | | | | | | | | | | | | 5,211 | | | 10,421 | | | 20,842 | | | | | | | | | | | | 474,989 | | 2/23/21 | | | 2/18/21 | | | | | | | | | | | | | | | | | | | | | 5,210 | | | | | | | | | 237,472 | | 2/23/21 | | | 2/18/21 | | | | | | | | | | | | | | | | | | | | | | | | 13,201 | | | $45.58 | | | 237,486 | Enrique Miñarro Viseras | | | | | | | | | $52,144 | | | $417,150 | | | $834,299 | | | | | | | | | | | | | | | | | | | | | | | 2/23/21 | | | 2/18/21 | | | | | | | | | | | | 6,033 | | | 12,066 | | | 24,132 | | | | | | | | | | | | 549,968 | | 2/23/21 | | | 2/18/21 | | | | | | | | | | | | | | | | | | | | | 6,033 | | | | | | | | | 274,984 | | 2/23/21 | | | 2/18/21 | | | | | | | | | | | | | | | | | | | | | | | | 15,286 | | | $45.58 | | | 274,995 | Michael Weatherred | | | | | | | | | $38,906 | | | $311,250 | | | $622,500 | | | | | | | | | | | | | | | | | | | | | | | 2/23/21 | | | 2/18/21 | | | | | | | | | | | | 3,839 | | | 7,678 | | | 15,356 | | | | | | | | | | | | 349,963 | | 2/23/21 | | | 2/18/21 | | | | | | | | | | | | | | | | | | | | | 3,839 | | | | | | | | | 174,982 | | 2/23/21 | | | 2/18/21 | | | | | | | | | | | | | | | | | | | | | | | | 9,727 | | | $45.58 | | | 174,989 |
(1)
| Reflects the possible payouts of cash incentive compensation under the 2021 MIP. The actual amounts earned are described in the “Non-Equity Incentive Plan Compensation” column of the “Summary Compensation Table.” Mr. Miñarro Viseras is based in Europe and compensated in Euros. His Estimated Possible Non-Equity Incentive Plan Payout amounts were converted to U.S. dollars at an exchange rate of 1.1357, which was the 5-year average exchange rate as of December 31, 2020. |
(2)
| Reflects performance stock units granted under our 2017 Omnibus Incentive Plan. Actual earned award may range from 0% to 200% based on performance over a three-year performance period ending December 31, 2023. Vesting conditions and other key terms of these awards are discussed in more detail above under “Compensation Discussion and Analysis - 2021 Executive Compensation Program in Detail - Long-Term Equity Incentive Awards” and “Compensation Discussion and Analysis - 2021 Executive Compensation Program in Detail - 2021 Leadership and Compensation Developments.” |
(3)
| Reflects RSUs granted under our 2017 Omnibus Incentive Plan. Vesting conditions and other key terms of these awards are discussed in more detail above under “Compensation Discussion and Analysis - 2021 Executive Compensation Program in Detail - Long-Term Equity Incentive Awards” and “Compensation Discussion and Analysis - 2021 Executive Compensation Program in Detail - 2020 Leadership and Compensation Developments.” |
(4)
| Reflects stock options granted under our 2017 Omnibus Incentive Plan. Vesting conditions and other key terms of these awards are discussed in more detail above under “Compensation Discussion and Analysis - 2021 Executive Compensation Program in Detail - Long-Term Equity Incentive Awards” and “Compensation Discussion and Analysis - 2021 Executive Compensation Program in Detail - 2021 Leadership and Compensation Developments.” |
(5)
| Represents the grant date fair value of the awards computed in accordance with FASB ASC that was awarded to him in 2019 to encourage him to relocate to the Charlotte area after the Merger. |
(3)
| Represents the aggregate grant date fair value of the awards computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation - Stock Compensation (“FASB ASC Topic 718”), using the assumptions discussed in Note 16: “Stock-Based Compensation Plans” of the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022. Amounts presented in the Stock Awards column for 2021 and 2020 have been recalculated to conform to the methodology utilized in 2022. The maximum value as of the grant date of performance stock units awarded in 2022 is as follows: Mr. Reynal: $51,976,972 ($8,357,972 relates to Mr. Reynal’s annual PSU award, $7,334,000 relates to his special TSR PSU award and $36,285,000 relates to his special Adjusted EPS PSU award); Mr. Kini: $1,671,594; Mr. Miñarro Viseras: $1,402,947; Mr. Schiesl: $1,313,314; and Mr. Weatherred: $1,014,874. |
(4)
| For Mr. Reynal, the Stock Awards in 2022 include $43,619,000 in performance-based restricted stock units granted to him as part of the one-time Performance-Based Award, which vest only upon meeting certain performance criteria and Mr. Reynal remaining with the Company long-term. As described more fully in “Executive Summary - Performance-Based Leadership Equity Incentive Award & New CEO Employment Agreement,” the Performance-Based-Award is a one-time extraordinary award designed by the Compensation Committee to (i) drive the creation of long-term stockholder value, (ii) further strengthen the alignment of Mr. Reynal’s interests with those of long-term stockholders, and (iii) encourage the retention of Mr. Reynal for the next five to ten years. |
(5)
| Amounts shown for 2022 reflect amounts earned under our 2022 MIP. |
(6)
| Amounts reported under All Other Compensation for 2022 reflect the following: |
Vicente Reynal | | | 82,800 | | | 1,404 | | | 26,025 | | | 53,009 | | | 6,285 | | | 169,523 | Vikram Kini | | | 89,413 | | | 702 | | | ― | | | ― | | | ― | | | 90,115 | Enrique Miñarro Viseras | | | ― | | | 687 | | | 9,733 | | | ― | | | 19,994 | | | 30,414 | Andrew Schiesl | | | 97,725 | | | 702 | | | 10,000 | | | ― | | | ― | | | 108,427 | Michael Weatherred | | | 73,400 | | | 583 | | | 10,000 | | | ― | | | ― | | | 83,983 |
(a)
| Reflects Company matching contributions in the tax-qualified 401(k) Plan and the non-tax-qualified Supplemental Contribution Plan. |
(b)
| For Mr. Reynal, reflects reimbursement of executive physical expenses not covered by insurance. For Mr. Miñarro Viseras, reflects actual Company expenditures for use, including business use, of a Company car, including expenditures for the car lease and gas. |
(7)
| Mr. Miñarro Viseras served as senior vice president and general manager of the Industrial Technologies and Services, Europe, Middle East, India and Africa (EMEIA) business unit of the Company until April 10, 2023. Mr. Miñarro Viseras is based in Europe and compensated in Euros. We converted his 2022 cash compensation, his amounts earned under our 2022 MIP, and amounts shown in the “All Other Compensation” column for him to U.S. dollars at an exchange rate of 1.1491, which was the five-year average exchange rate as of December 31, 2021. |
TABLE OF CONTENTS Grants of Plan-Based Awards in 2022 Vicente Reynal | | | | | | 206,250 | | | 1,650,000 | | | 3,300,000 | | | | | | | | | | | | | | | | | | | | | | | 2/22/22 | | | | | | | | | | | | 32,963 | | | 65,925 | | | 131,850 | | | | | | | | | | | | 4,178,986 | | 2/22/22 | | | | | | | | | | | | | | | | | | | | | 32,962 | | | | | | | | | 1,749,953 | | 2/22/22 | | | | | | | | | | | | | | | | | | | | | | | | 82,547 | | | $53.09 | | | 1,749,996 | | 9/1/22(6) | | | | | | | | | | | | | | | 250,000 | | | | | | | | | | | | | | | 12,095,000 | | 9/1/22(6) | | | | | | | | | | | | | | | 250,000 | | | | | | | | | | | | | | | 12,095,000 | | 9/1/22(6) | | | | | | | | | | | | | | | 250,000 | | | | | | | | | | | | | | | 12,095,000 | | 9/1/22(6) | | | | | | | | | | | | | | | 250,000 | | | | | | | | | | | | | | | 7,334,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Vikram Kini | | | | | | 55,781 | | | 446,250 | | | 892,500 | | | | | | | | | | | | | | | | | | | | | | | 2/22/22 | | | | | | | | | | | | 6,593 | | | 13,185 | | | 26,370 | | | | | | | | | | | | 835,797 | | 2/22/22 | | | | | | | | | | | | | | | | | | | | | 6,592 | | | | | | | | | 349,969 | | 2/22/22 | | | | | | | | | | | | | | | | | | | | | | | | 16,509 | | | $53.09 | | | 349,991 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Enrique Miñarro Viseras
| | | | | | 53,656 | | | 429,250 | | | 858,500 | | | | | | | | | | | | | | | | | | | | | | | 2/22/22 | | | | | | | | | | | | 5,533 | | | 11,066 | | | 22,132 | | | | | | | | | | | | 701,474 | | 2/22/22 | | | | | | | | | | | | | | | | | | | | | 5,533 | | | | | | | | | 293,747 | | 2/22/22 | | | | | | | | | | | | | | | | | | | | | | | | 13,856 | | | $53.09 | | | 293,747 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Andrew Schiesl | | | | | | 46,875 | | | 375,000 | | | 750,000 | | | | | | | | | | | | | | | | | | | | | | | 2/22/22 | | | | | | | | | | | | 5,180 | | | 10,359 | | | 20,718 | | | | | | | | | | | | 656,657 | | 2/22/22 | | | | | | | | | | | | | | | | | | | | | 5,179 | | | | | | | | | 274,953 | | 2/22/22 | | | | | | | | | | | | | | | | | | | | | | | | 12,971 | | | $53.09 | | | 274,985 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Michael Weatherred | | | | | | 40,313 | | | 322,500 | | | 645,000 | | | | | | | | | | | | | | | | | | | | | | | 2/22/22 | | | | | | | | | | | | 4,003 | | | 8,005 | | | 16,010 | | | | | | | | | | | | 507,437 | | 2/22/22 | | | | | | | | | | | | | | | | | | | | | 4,002 | | | | | | | | | 212,466 | | 2/22/22 | | | | | | | | | | | | | | | | | | | | | | | | 10,023 | | | $53.09 | | | 212,488 |
(1)
| Reflects the possible payouts of cash incentive compensation under the 2022 MIP. The actual amounts earned are described in the “Non-Equity Incentive Plan Compensation” column of the “Summary Compensation Table.” Mr. Miñarro Viseras is based in Europe and compensated in Euros. His Estimated Possible Non-Equity Incentive Plan Payout amounts were converted to U.S. dollars at an exchange rate of 1.1491, which was the 5-year average exchange rate as of December 31, 2021. |
(2)
| Reflects performance stock units granted under our 2017 Omnibus Incentive Plan. With respect to awards granted in February 2022, the actual earned award may range from 0% to 200% based on performance over a three-year performance period ending December 31, 2024. Vesting conditions and other key terms of these awards are discussed in more detail above under “Compensation Discussion and Analysis - 2022 Executive Compensation Program in Detail - Long-Term Equity Incentive Awards.” For Mr. Reynal, awards granted on September 1, 2022 reflect “Adjusted EPS PSUs” and “TSR PSUs,” respectively, as discussed in more detail under “Compensation Discussion and Analysis - 2022 Executive Compensation Program in Detail - CEO Performance-Based Leadership Equity Incentive Award.” There are no threshold or maximum payout levels applicable to Mr. Reynal’s Performance-Based Award. |
(3)
| Reflects RSUs granted under our 2017 Omnibus Incentive Plan. Vesting conditions and other key terms of these awards are discussed in more detail above under “Compensation Discussion and Analysis - 2022 Executive Compensation Program in Detail - Long-Term Equity Incentive Awards.” |
(4)
| Reflects stock options granted under our 2017 Omnibus Incentive Plan. Vesting conditions and other key terms of these awards are discussed in more detail above under “Compensation Discussion and Analysis - 2022 Executive Compensation Program in Detail - Long-Term Equity Incentive Awards.” |
(5)
| Represents the grant date fair value of the awards computed in accordance with FASB ASC Topic 718, using the assumptions discussed in Note 16: “Stock-Based Compensation Plans” of the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022. The stock options have an exercise price per share equal to the closing price of the Company's common stock as reported on the NYSE on the date of grant. |
Narrative Disclosure(6)
| Represents performance-based restricted stock units granted to Summary Compensation TableMr. Reynal as part of the one-time Performance-Based Award, which vest only upon meeting certain performance criteria and Grants of Plan-Based Awards in 2021Summary of NEO Offer Letters and Employment Agreements
In general,Mr. Reynal remaining with the Company does not enter into employment agreements with employees, including our executive officers, however we do enter into offer letters with many of our executive officers. In addition, we did enter into an employment agreement with Mr. Miñarro Viseraslong-term. As described more fully in 2016 and“Executive Summary - Performance-Based Leadership Equity Incentive Award & New CEO Employment Agreement,” the Performance-Based-Award is a new employment agreement with him in October 2018. Descriptions of the offer letters we entered into with Messrs. Reynal, Schiesl, and Weatherred, and the employment agreement we entered into with Mr. Miñarro Viseras are provided below. All current NEOs serve at the will of our board of directors.
TABLE OF CONTENTS
Offer Letter with Mr. Reynal
The Company entered into an offer letter withone-time extraordinary award for Mr. Reynal dated April 17, 2015, which was modifieddesigned by a letter, dated November 19, 2015, we entered intothe Compensation Committee to (i) drive the creation of long-term stockholder value, (ii) further strengthen the alignment of Mr. Reynal’s interests with those of long-term stockholders, and (iii) encourage the retention of Mr. Reynal in connection with his promotionfor the next five to Chief Executive Officer of the Company (the offer letter, dated April 17, 2015, as so modified, the “Reynal Offer Letter”). The Reynal Offer Letter provides that, as of January 1, 2016, Mr. Reynal is entitled to receive a base salary of $750,000, which base salary was increased to $1,000,000 in March 2020, and that Mr. Reynal is entitled to participate in our annual MIP with a target award opportunity of 100% of his annual base salary, which target was increased to 150% of salary in March 2020.ten years.
|
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards in 2022 Summary of NEO Offer Letters and Employment Agreements In general, the Company historically has entered into offer letters with its executive officers in lieu of employment agreements. However, as previously discussed, we did enter into an employment agreement with Mr. Reynal in September 2022. We also entered into an employment agreement with Mr. Miñarro Viseras in TABLE OF CONTENTS October 2018, and a new employment agreement in April 2023. Descriptions of the offer letters we entered into with Messrs. Reynal, Schiesl, and Weatherred, and the employment agreement with Mr. Reynal and the employment agreements with Mr. Miñarro Viseras are provided below. Employment Agreement with Mr. Reynal Effective September 1, 2022, the Compensation Committee approved a new employment agreement with Mr. Reynal. The employment agreement, which supersedes Mr. Reynal’s prior offer letter with the Company (the “Prior Agreement”), provides for an initial term of five years (with automatic one-year renewals), an annual base salary of $1,100,000 (which is an increase of $100,000 from his annual base salary in 2021), an annual target bonus of 150% of annual base salary (which target bonus remains unchanged from the Prior Agreement) and eligibility for the performance-conditioned stock option grants described above under “Executive Summary - Performance-Based Leadership Equity Incentive Award & New CEO Employment Agreement.” Under the Employment Agreement, Mr. Reynal’s severance entitlements for a termination by the Company without “Cause” or his resignation for “Good Reason” (each as defined in the Employment Agreement) remain unchanged from the Prior Agreement and are discussed below under “Potential Payments to Named Executive Officers upon Termination of Employment or Change in Control.” The Employment Agreement also provides that Mr. Reynal may make personal use of the aircraft leased by the Company for an amount of time that does not result in the Company incurring more than $200,000 in aggregate incremental costs per year. In addition, in exchange for entering into the Employment Agreement and receiving the Performance-Based Award, the post-termination non-competition, non-solicitation of clients and non-solicitation of employees covenants increased from 12 months under the Prior Agreement to 24 months. Employment Agreements with Mr. Miñarro Viseras The employment agreement the Company entered into with Mr. Miñarro Viseras on October 22, 2018 (the “Miñarro Viseras Employment Agreement”) provided that Mr. Miñarro Viseras was entitled to receive a base salary of €330,000, was eligible to participate in the annual MIP with an award opportunity of up to 45% of his base salary, and was eligible to participate in our Management Equity Program. In addition, under the Miñarro Viseras Employment Agreement, in 2022, Mr. Miñarro Viseras was entitled to use of a company car and was also covered under the standard group accident insurance of the Company. On April 10, 2023, we entered into the New Miñarro Viseras Employment Agreement, effective April 3, 2023, in connection with the appointment of Mr. Miñarro Viseras to the position of senior vice president and general manager, Global Precision and Science Technologies. Pursuant to the New Miñarro Viseras Employment Agreement, Mr. Miñarro Viseras will receive a base salary of $540,000 and continued entitlement to use of a company car. Under the New Miñarro Viseras Employment Agreement, we are required to provide Mr. Miñarro Viseras with six months’ notice in the event of his termination, and we have the option to place him on garden leave during all or part of his notice period immediately until the date of termination provided we continue to pay him his full pay and benefits during such notice period. The New Miñarro Viseras Employment Agreement subjects Mr. Miñarro Viseras to non-competition, non-solicitation of clients and non-solicitation of employees covenants that apply during his employment, notice period, as well as for six months following termination of employment (or the start of garden leave, if sooner). Mr. Miñarro Viseras is entitled to continue to receive his base salary during the six-month post-termination restriction period as consideration for such covenants, which amount must be repaid by him if he violates the restrictive covenants. The New Miñarro Viseras Employment Agreement otherwise has terms that are materially consistent with his prior employment agreement. Offer Letter with Mr. Schiesl The Company entered into an offer letter with Mr. Schiesl, dated November 25, 2013 (the “Schiesl Offer Letter”). The Schiesl Offer Letter provides that Mr. Schiesl is entitled to receive a base salary of $450,000 and is eligible to participate in the annual MIP with a target award opportunity of 75% of his base salary. Mr. Schiesl is also eligible to participate in the Company’s 401(k), Supplemental Contribution, medical, dental, life insurance and disability plans, along with a comprehensive wellness program. The Schiesl Offer Letter also contains severance arrangements, which are discussed below under “Potential Payments to Named Executive Officers upon Termination of Employment or Change in Control.” TABLE OF CONTENTS Offer Letter with Mr. Weatherred The Company entered into an offer letter with Mr. Weatherred, dated April 30, 2018 (the “Weatherred Offer Letter”), in connection with his appointment as Vice President, Gardner Denver Operating System. The Weatherred Offer Letter provides that Mr. Weatherred is entitled to receive an annual base salary of $345,000, and to participate in the Company’s Management Incentive Plan with an annual target award opportunity of 50% of his annual base salary. Mr. Weatherred was eligible to participate in the Company’s long-term incentive plan with a target annual equity grant opportunity equal to $275,000. The Weatherred Offer Letter also contains severance arrangements, which are discussed below under “Potential Payments to Named Executive Officers upon Termination of Employment or Change in Control.” Outstanding Equity Awards at 2022 Fiscal Year End Vicente Reynal | | | 5/24/15 | | | 438,486 | | | ― | | | $10.61 | | | 5/24/25 | | | | | | | | | | | | | | 5/24/15 | | | 258,488 | | | ― | | | $10.61 | | | 5/24/25 | | | | | | | | | | | | | | 5/10/16 | | | 292,702 | | | ― | | | $10.61 | | | 5/10/26 | | | | | | | | | | | | | | 5/10/16 | | | 292,701 | | | ― | | | $10.61 | | | 5/10/26 | | | | | | | | | | | | | | 2/22/18 | | | 106,761 | | | 35,588 | | | $32.06 | | | 2/22/28 | | | 15,596 | | | $814,891 | | | | | | | | 2/21/19 | | | 165,106 | | | 55,036 | | | $27.05 | | | 2/21/29 | | | 20,102 | | | $1,050,330 | | | | | | | | 3/6/20 | | | 85,459 | | | 85,459 | | | $27.79 | | | 3/6/30 | | | 30,137 | | | $1,574,658 | | | 241,092(5) | | | $12,597,057 | | 2/23/21 | | | 23,276 | | | 69,831 | | | $45.58 | | | 2/23/31 | | | 27,561 | | | $1,440,062 | | | 146,994(6) | | | $7,680,437 | | 2/22/22 | | | ― | | | 82,547 | | | $53.09 | | | 2/22/32 | | | 32,962 | | | $1,722,265 | | | 131,850(7) | | | $6,889,163 | | 9/1/22 | | | | | | | | | | | | | | | | | | | | | 250,000(8) | | | $13,062,500 | | 9/1/22 | | | | | | | | | | | | | | | | | | | | | 250,000(8) | | | $13,062,500 | | 9/1/22 | | | | | | | | | | | | | | | | | | | | | 250,000(8) | | | $13,062,500 | | 9/1/22 | | | | | | | | | | | | | | | | | | | | | 250,000(9) | | | $13,062,500 | Vikram Kini | | | 3/19/14 | | | 84,576 | | | ― | | | $8.16 | | | 3/19/24 | | | | | | | | | | | | | | 3/19/14 | | | 84,577 | | | ― | | | $8.16 | | | 3/19/24 | | | | | | | | | | | | | | 12/9/16 | | | 7,066 | | | ― | | | $11.43 | | | 12/9/26 | | | | | | | | | | | | | | 12/9/16 | | | 7,066 | | | ― | | | $11.43 | | | 12/9/26 | | | | | | | | | | | | | | 2/22/18 | | | 10,676 | | | 3,559 | | | $32.06 | | | 2/22/28 | | | 1,560 | | | $81,510 | | | | | | | | 2/21/19 | | | 15,182 | | | 5,061 | | | $27.05 | | | 2/21/29 | | | 1,849 | | | $96,610 | | | | | | | | 3/6/20 | | | 5,102 | | | 5,102 | | | $27.79 | | | 3/6/30 | | | 1,799 | | | $93,998 | | | 14,392(5) | | | $751,982 | | 6/30/20 | | | 6,660 | | | 6,661 | | | $28.12 | | | 6/30/30 | | | 2,667 | | | $139,351 | | | 21,336(5) | | | $1,114,806 | | 2/23/21 | | | 3,821 | | | 11,465 | | | $45.58 | | | 2/23/31 | | | 4,525 | | | $236,431 | | | 24,132(6) | | | $1,260,897 | | 2/22/22 | | | ― | | | 16,509 | | | $53.09 | | | 2/22/32 | | | 6,592 | | | $344,432 | | | 26,370(7) | | | $1,377,833 | Enrique Miñarro Viseras
| | | 5/10/16 | | | 13,607 | | | ― | | | $10.61 | | | 5/10/26 | | | | | | | | | | | | | | 5/10/16 | | | 68,037 | | | ― | | | $10.61 | | | 5/10/26 | | | | | | | | | | | | | | 2/22/18 | | | 13,345 | | | 4,449 | | | $32.06 | | | 2/22/28 | | | 1,950 | | | $101,888 | | | | | | | | 9/11/18 | | | 22,361 | | | ― | | | $26.18 | | | 9/11/28 | | | | | | | | | | | | | | 2/21/19 | | | 18,978 | | | 6,326 | | | $27.05 | | | 2/21/29 | | | 2,311 | | | $120,750 | | | | | | | | 3/6/20 | | | 12,755 | | | 12,755 | | | $27.79 | | | 3/6/30 | | | 4,498 | | | $235,021 | | | 35,984(5) | | | $1,880,164 | | 2/23/21 | | | 3,821 | | | 11,465 | | | $45.58 | | | 2/23/31 | | | 4,525 | | | $236,431 | | | 24,132(6) | | | $1,260,897 | | 2/22/22 | | | ― | | | 13,856 | | | $53.09 | | | 2/22/32 | | | 5,533 | | | $289,099 | | | 22,132(7) | | | $1,156,397 | Andrew Schiesl | | | 2/22/18 | | | 18,015 | | | 6,006 | | | $32.06 | | | 2/22/28 | | | 2,632 | | | $137,522 | | | | | | | | 2/21/19 | | | 27,517 | | | 9,173 | | | $27.05 | | | 2/21/29 | | | 3,351 | | | $175,090 | | | | | | | | 3/6/20 | | | 12,117 | | | 12,117 | | | $27.79 | | | 3/6/30 | | | 4,273 | | | $223,264 | | | 34,184(5) | | | $1,786,114 | | 2/23/21 | | | 3,300 | | | 9,901 | | | $45.58 | | | 2/23/31 | | | 3,908 | | | $204,193 | | | 20,842(6) | | | $1,088,995 | | 2/22/22 | | | ― | | | 12,971 | | | $53.09 | | | 2/22/32 | | | 5,179 | | | $270,603 | | | 20,718(7) | | | $1,082,516 | Michael Weatherred | | | 5/14/18 | | | 9,800 | | | ― | | | $33.46 | | | 5/14/28 | | | | | | | | | | | | | | 2/21/19 | | | 13,284 | | | 4,429 | | | $27.05 | | | 2/21/29 | | | 1,618 | | | $84,541 | | | | | | | | 3/6/20 | | | 8,928 | | | 8,929 | | | $27.79 | | | 3/6/30 | | | 3,149 | | | $164,535 | | | 25,188(5) | | | $1,316,073 | | 2/23/21 | | | 2,431 | | | 7,296 | | | $45.58 | | | 2/23/31 | | | 2,880 | | | $150,480 | | | 15,356(6) | | | $802,351 | | 2/22/22 | | | ― | | | 10,023 | | | $53.09 | | | 2/22/32 | | | 4,002 | | | $209,105 | | | 16,010(7) | | | $836,523 |
(1)
| Reflects vested and exercisable Time Options and Performance Options granted pursuant to the terms of the Reynal Offer Letter, Mr. Reynal was expected to invest a minimum of $2,000,000, and was given the opportunity to invest significantly more, into our common stock, subject to satisfaction of applicable securities law requirements.Mr. Reynal is also eligible to participate in the Company’s 401(k), Supplemental Contribution, medical, dental, life insurance and disability plans, along with a comprehensive wellness program.
The Reynal Offer Letter also contains severance arrangements, which are discussed below under “Potential Payments to Named Executive Officers upon Termination of Employment or Change in Control.”
Offer Letter with Mr. Schiesl
The Company entered into an offer letter with Mr. Schiesl, dated November 25, 2013 (the “Schiesl Offer Letter”). The Schiesl Offer Letter provides that Mr. Schiesl is entitled to receive a base salary of $450,000, which base salary was increased to $500,000 in March 2020, and is eligible to participate in the annual MIP with a target award opportunity of 75% of his base salary.
Mr. Schiesl is also eligible to participate in the Company’s 401(k), Supplemental Contribution, medical, dental, life insurance and disability plans, along with a comprehensive wellness program.
The Schiesl Offer Letter also contains severance arrangements, which are discussed below under “Potential Payments to Named Executive Officers upon Termination of Employment or Change in Control.”
Employment Agreement with Mr. Miñarro Viseras
The employment agreement the Company entered into with Mr. Miñarro Viseras on October 22, 2018 (the “Miñarro Viseras Employment Agreement”) provided that Mr. Miñarro Viseras was entitled to receive a base salary of €330,000, which base salary was increased to €432,125 in April 2021, was eligible to participate in the annual MIP with an award opportunity of up to 45% of his base salary, which target was increased to 85% of salary in March 2020, and was eligible to participate in our Management Equity Program.
Under the Miñarro Viseras Employment Agreement, in 2021, Mr. Miñarro Viseras was entitled to use of a company car and up to €53,061 per year of international school assistance for his children through the 2021 spring semester.
Under the Miñarro Viseras Employment Agreement, Mr. Miñarro Viseras was also covered under the standard group accident insurance of the Company.
Offer Letter with Mr. Weatherred
The Company entered into an offer letter with Mr. Weatherred, dated April 30, 2018 (the “Weatherred Offer Letter”), in connection with his appointment as Vice President, Gardner Denver Operating System. The Weatherred Offer Letter provides that Mr. Weatherred is entitled to receive an annual base salary of $345,000, which base salary was increased to $415,000 in March 2020, and to participate in the Company’s ManagementStock Incentive Plan with an annual target award opportunity of 50% of his annual base salary, which target was increasedand 2017 Omnibus Incentive Plan.
|
(2)
| Reflects unvested stock options granted prior to 75% of salary in March 2020.Mr. Weatherred was eligibleour initial public offering pursuant to participate in the Company’s long-term incentive plan with a target annual equity grant opportunity equal to $275,000, which target annual equity grant opportunity was increased to $700,000 in March 2020.
The Weatherred Offer Letter also contains severance arrangements, which are discussed below under “Potential Payments to Named Executive Officers upon Termination of Employment or Change in Control.”
TABLE OF CONTENTS
Outstanding Equity Awards at 2021 Fiscal Year End
Vicente Reynal | | | 5/24/15 | | | 438,486 | | | ― | | | $10.61 | | | 5/24/25 | | | | | | | | | | | | | | | | 5/24/15 | | | 258,488 | | | ― | | | $10.61 | | | 5/24/25 | | | | | | | | | | | | | | | | 5/10/16 | | | 292,702 | | | ― | | | $10.61 | | | 5/10/26 | | | | | | | | | | | | | | | | 5/10/16 | | | 292,701 | | | ― | | | $10.61 | | | 5/10/26 | | | | | | | | | | | | | | | | 2/22/18 | | | 71,174 | | | 71,175 | | | $32.06 | | | 2/22/28 | | | 31,192 | | | 1,929,849 | | | | | | | | | | 2/21/19 | | | 110,070 | | | 110,072 | | | $27.05 | | | 2/21/29 | | | 40,204 | | | 2,487,421 | | | | | | | | | | 3/6/20 | | | 42,729 | | | 128,189 | | | $27.79 | | | 3/6/30 | | | 45,205 | | | 2,796,833 | | | 241,092(5) | | | 14,916,362 | | | | 3/6/20 | | | | | | | | | | | | | | | 30,137 | | | 1,864,576 | | | | | | | | | | 2/23/21 | | | ― | | | 93,107 | | | $45.58 | | | 2/23/31 | | | 36,748 | | | 2,273,599 | | | 146,994(6) | | | 9,094,519 | Vikram Kini | | | 3/19/14 | | | 84,576 | | | ― | | | $8.16 | | | 3/19/24 | | | | | | | | | | | | | | | | 3/19/14 | | | 84,577 | | | ― | | | $8.16 | | | 3/19/24 | | | | | | | | �� | | | | | | | | 12/9/16 | | | 7,066 | | | ― | | | $11.43 | | | 12/9/26 | | | | | | | | | | | | | | | | 12/9/16 | | | 7,066 | | | ― | | | $11.43 | | | 12/9/26 | | | | | | | | | | | | | | | | 2/22/18 | | | 7,117 | | | 7,118 | | | $32.06 | | | 2/22/28 | | | 3,120 | | | 193,034 | | | | | | | | | | 2/21/19 | | | 10,121 | | | 10,122 | | | $27.05 | | | 2/21/29 | | | 3,698 | | | 228,795 | | | | | | | | | | 3/6/20 | | | 3,821 | | | 11,465 | | | $27.79 | | | 3/6/30 | | | 2,699 | | | 166,987 | | | 14,392(5) | | | 890,433 | | | | 3/6/20 | | | | | | | | | | | | | | | 1,799 | | | 111,304 | | | | | | | | | | 6/30/20 | | | 3,330 | | | 9,991 | | | $28.12 | | | 6/30/30 | | | 4,001 | | | 247,542 | | | 21,336(5) | | | 1,320,058 | | | | 2/23/21 | | | ― | | | 15,286 | | | $45.58 | | | 2/23/31 | | | 6,033 | | | 373,262 | | | 24,132(6) | | | 1,493,047 | Andrew Schiesl | | | 2/22/18 | | | 12,010 | | | 12,011 | | | $32.06 | | | 2/22/28 | | | 5,264 | | | 325,684 | | | | | | | | | | 2/21/19 | | | 18,344 | | | 18,346 | | | $27.05 | | | 2/21/29 | | | 6,701 | | | 414,591 | | | | | | | | | | 3/6/20 | | | 6,058 | | | 18,176 | | | $27.79 | | | 3/6/30 | | | 6,410 | | | 396,587 | | | 34,184(5) | | | 2,114,964 | | | | 3/6/20 | | | | | | | | | | | | | | | 4,273 | | | 264,371 | | | | | | | | | | 2/23/21 | | | ― | | | 13,201 | | | $45.58 | | | 2/23/31 | | | 5,210 | | | 322,343 | | | 20,842(6) | | | 1,289,495 | Enrique Miñarro Viseras | | | 5/10/16 | | | 13,607 | | | ― | | | $10.61 | | | 5/10/26 | | | | | | | | | | | | | | | | 5/10/16 | | | 68,037 | | | ― | | | $10.61 | | | 5/10/26 | | | | | | | | | | | | | | | | 2/22/18 | | | 8,896 | | | 8,898 | | | $32.06 | | | 2/22/28 | | | 3,900 | | | 241,293 | | | | | | | | | | 9/11/18 | | | 16,770 | | | 5,591 | | | $26.18 | | | 9/11/28 | | | 2,388 | | | 147,746 | | | | | | | | | | 2/21/19 | | | 12,652 | | | 12,652 | | | $27.05 | | | 2/21/29 | | | 4,622 | | | 285,963 | | | | | | | | | | 3/6/20 | | | 6,377 | | | 19,133 | | | $27.79 | | | 3/6/30 | | | 6,747 | | | 417,437 | | | 35,984(5) | | | 2,226,330 | | | | 3/6/20 | | | | | | | | | | | | | | | 4,498 | | | 278,291 | | | | | | | | | | 2/23/21 | | | ― | | | 15,286 | | | $45.58 | | | 2/23/31 | | | 6,033 | | | 373,262 | | | 24,132(6) | | | 1,493,047 | Michael Weatherred | | | 5/14/18 | | | 7,350 | | | 2,450 | | | $33.46 | | | 5/14/28 | | | 1,028 | | | 63,602 | | | | | | | | | | 2/21/19 | | | 8,856 | | | 8,857 | | | $27.05 | | | 2/21/29 | | | 3,236 | | | 200,211 | | | | | | | | | | 3/6/20 | | | 4,464 | | | 13,393 | | | $27.79 | | | 3/6/30 | | | 4,723 | | | 292,212 | | | 25,188(5) | | | 1,558,382 | | | | 3/6/20 | | | | | | | | | | | | | | | 3,149 | | | 194,829 | | | | | | | | | | 2/23/21 | | | ― | | | 9,727 | | | $45.58 | | | 2/23/31 | | | 3,839 | | | 237,519 | | | 15,356(6) | | | 950,076 |
(1)
| Reflects vested and exercisable Time Options and Performance Options granted pursuant to our 2013 Stock Incentive Plan and 2017 Omnibus Incentive Plan. |
(2)
| Reflects unvested stock options granted prior to our initial public offering pursuant to our 2013 Stock Incentive Plan and unvested stock options granted from 2018 through 2020our 2013 Stock Incentive Plan and unvested stock options granted from 2018 through 2022 pursuant to our 2017 Omnibus Incentive Plan. Stock options granted to our NEOs on February 22, 2018 vest in equal installments on the second, third, fourth, and fifth anniversaries of the grant date. All other unvested stock options granted to our NEOs vest in equal installments on each of the first four anniversaries of the grant date. |
(3)
| Reflects unvested RSUs and PSUs granted pursuant to our 2017 Omnibus Incentive Plan. RSUs granted to our NEOs on February 22, 2018 vest in equal installments on the second, third, fourth, and fifth anniversaries of the grant date. For NEOs with two rows of March 6, 2020 grants, the second grant of RSUs vests in equal installments on the first and second anniversaries of the grant date. All other RSUs granted to our NEOs vest in equal installments on the first four anniversaries of the grant date. |
(4)
| Values determined based on the December 31, 2021 closing price of the Company's common stock on the NYSE of $61.87. |
(5)
| Reflects PSUs that will vest, if at all, based on the Company’s achievement of the Relative TSR performance measure over the performance period beginning on January 1, 2020 and ending on December 31, 2022. As of December 31, 2021, the achievement level with respect to Relative TSR was between target and maximum. Accordingly, the number of PSUs reported in the table reflects the amount that would be earned for maximum performance.TABLE OF CONTENTS (3)
| Reflects unvested RSUs and PSUs granted pursuant to our 2017 Omnibus Incentive Plan. RSUs granted to our NEOs on February 22, 2018 vest in equal installments on the second, third, fourth, and fifth anniversaries of the grant date. All other RSUs granted to our NEOs vest in equal installments on the first four anniversaries of the grant date. |
(4)
| Values determined based on the December 30, 2022 closing price of the Company’s common stock on the NYSE of $52.25. |
(5)
| Represents the total number of PSUs earned under the 2020-2022 Performance Plan for the three-year performance period beginning on January 1, 2020 and ending on December 31, 2022, which vested on February 13, 2023. |
(6)
| Reflects PSUs that will vest, if at all, based on the Company’s achievement of the Relative TSR performance measure over the performance period beginning on January 1, 2021 and ending on December 31, 2023. The actual number of shares that will vest with respect to the PSUs is not yet determinable. |
(6)
| Reflects PSUs that will vest, if at all, based on the Company’s achievement of the Relative TSR performance measure over the performance period beginning on January 1, 2021 and ending on December 31, 2023. As of December 31, 2021, the achievement level with respect to Relative TSR was between target and maximum. Accordingly, the number of PSUs reported in the table reflects the amount that would be earned for maximum performance. The actual number of shares that will vest with respect to the PSUs is not yet determinable. |
TABLE OF CONTENTS
Option Exercises(7)
| Reflects PSUs that will vest, if at all, based on the Company’s achievement of the Relative TSR performance measure over the performance period beginning on January 1, 2022 and Stock Vestedending on December 31, 2024. The number of PSUs reported in 2021the table reflects the amount that would be earned for maximum performance. The following table provides information regarding Options exercises and RSUs vested during fiscal 2021 for our NEOs. Vicente Reynal | | | 60,000 | | | 2,483,400 | | | 80,902 | | | 3,802,060 | Vikram Kini | | | ― | | | ― | | | 7,440 | | | 348,022 | Andrew Schiesl | | | ― | | | ― | | | 12,391 | | | 579,416 | Enrique Miñarro Viseras | | | ― | | | ― | | | 13,394 | | | 651,287 | Michael Weatherred | | | ― | | | ― | | | 7,367 | | | 354,556 |
(1)
| Value realized on exercise is based on the gain, if any, equal to the difference between the fair market value of the stock acquired upon exercise on the exercise date less the exercise price, multiplied by the number of options exercised. |
(2)
| The value realized on vesting is based on the closing price of our common stock on the NYSE on the vesting date. If vesting occurs on a day on which the NYSE is closed, the value realized on vesting is based on the closing price on the last trading day prior to the vesting date.actual number of shares that will vest with respect to the PSUs is not yet determinable. |
Pension Benefits(8)
| Reflects PSUs that will vest, if at all, based on the Company’s achievement of certain EPS growth goals over the performance period beginning on January 1, 2022 and ending on December 31, 2026. The number of PSUs reported in the table reflects the amount that would be earned for maximum performance. The actual number of shares that will vest with respect to the PSUs is not yet determinable. These PSUs were granted to Mr. Reynal as part of the one-time Performance-Based Award that vest only upon meeting certain performance criteria and Mr. Reynal remaining with the Company long-term. As described more fully in “Executive Summary - Fiscal 2021During 2021, no NEOs participated in eitherPerformance-Based Leadership Equity Incentive Award & New CEO Employment Agreement,” the Performance-Based-Award is a tax-qualified or non-qualified defined benefit plan sponsoredone-time extraordinary award for Mr. Reynal designed by the Company.
Non-Qualified Deferred Compensation Committee to (i) drive the creation of long-term stockholder value, (ii) further strengthen the alignment of Mr. Reynal’s interests with those of long-term stockholders, and (iii) encourage the retention of Mr. Reynal for the next five to ten years.
|
(9)
| Reflects PSUs that will vest, if at all, based on the Company’s achievement of an $81.85 60-day volume-weighted average closing price of the common stock over the performance period beginning on September 1, 2022 and ending on September 1, 2027. As of the date of this Proxy Statement, such performance goal has not been achieved and whether or not the PSUs will ultimately vest is not yet determinable. These PSUs were granted to Mr. Reynal as part of the one-time Performance-Based Award that vest only upon meeting certain performance criteria and Mr. Reynal remaining with the Company long-term. As described more fully in “Executive Summary - Fiscal 2021Vicente Reynal | | | 55,006 | | | 132,606 | | | 528,792 | | | ― | | | 3,889,841 | Vikram Kini | | | 260,265 | | | 26,545 | | | 162,399 | | | ― | | | 1,461,144 | Andrew Schiesl | | | 68,456 | | | 35,106 | | | 64,992 | | | ― | | | 825,774 | Enrique Miñarro Viseras | | | ― | | | ― | | | ― | | | ― | | | ― | Michael Weatherred | | | ― | | | 11,916 | | | 23,200 | | | ― | | | 144,971 |
(1)
| The amounts in this column are reported as compensation for fiscal 2021 in the “Base Salary” and “Non-Equity Incentive Plan Compensation” columns of the Summary Compensation Table.Performance-Based Leadership Equity Incentive Award & New CEO Employment Agreement,” the Performance-Based-Award is a one-time extraordinary award for Mr. Reynal designed by the Compensation Committee to (i) drive the creation of long-term stockholder value, (ii) further strengthen the alignment of Mr. Reynal’s interests with those of long-term stockholders, and (iii) encourage the retention of Mr. Reynal for the next five to ten years |
(2)
| Represents the amount of the matching contribution made by us in accordance with our Supplemental Contribution Plan. Matching contributions are reported for the year in which the compensation against which the applicable deferral election is applied has been earned (regardless of whether such matching contribution is actually credited to the NEO's non-qualified deferred compensation account in that year or the following year). The amounts in this column are reported as compensation for fiscal 2021 in the “All Other Compensation” column of the Summary Compensation Table.Option Exercises and Stock Vested in 2022 The following table provides information regarding Options exercises and RSUs vested during fiscal 2022 for our NEOs. Vicente Reynal | | | ― | | | ― | | | 90,090 | | | 4,466,876 | Vikram Kini | | | ― | | | ― | | | 8,948 | | | 440,436 | Enrique Miñarro Viseras | | | ― | | | ― | | | 14,902 | | | 737,018 | Andrew Schiesl | | | ― | | | ― | | | 13,694 | | | 682,197 | Michael Weatherred | | | ― | | | ― | | | 8,327 | | | 399,371 |
(1)
| Value realized on exercise is based on the gain, if any, equal to the difference between the fair market value of the stock acquired upon exercise on the exercise date less the exercise price, multiplied by the number of options exercised. |
(2)
| The value realized on vesting is based on the closing price of our common stock on the NYSE on the vesting date. If vesting occurs on a day on which the NYSE is closed, the value realized on vesting is based on the closing price on the last trading day prior to the vesting date. |
(3)
| Amounts in this column are not reported as compensation for fiscal 2021TABLE OF CONTENTS Pension Benefits – Fiscal 2022 During 2022, no NEOs participated in either a tax-qualified or non-qualified defined benefit plan sponsored by the Company. Non-Qualified Deferred Compensation – Fiscal 2022 Vicente Reynal | | | 64,500 | | | 64,500 | | | (619,922) | | | ― | | | 3,266,313 | Vikram Kini | | | 204,321 | | | 71,113 | | | (251,633) | | | ― | | | 1,286,682 | Enrique Miñarro Viseras | | | ― | | | ― | | | ― | | | ― | | | ― | Andrew Schiesl | | | 56,775 | | | 79,425 | | | (164,588) | | | ― | | | 721,330 | Michael Weatherred | | | 29,893 | | | 55,100 | | | (35,582) | | | ― | | | 182,466 |
(1)
| The amounts in this column are reported as compensation for fiscal 2022 in the “Base Salary” and “Non-Equity Incentive Plan Compensation” columns of the Summary Compensation Table. |
(2)
| Represents the amount of the matching contribution made by us in accordance with our Supplemental Contribution Plan. Matching contributions are reported for the year in which the compensation against which the applicable deferral election is applied has been earned (regardless of whether such matching contribution is actually credited to the NEO’s non-qualified deferred compensation account in that year or the following year). The amounts in this column are reported as compensation for fiscal 2022 in the “All Other Compensation” column of the Summary Compensation Table. |
(3)
| Amounts in this column are not reported as compensation for fiscal 2022 in the Summary Compensation Table since they do not reflect above-market or preferential earnings. |
(4)
| The amounts reported in this column include the following aggregate amounts for each of the following NEOs reported as compensation to such named executive officers for previous years in the “Base Salary,” “Non-Equity Incentive Plan Compensation” and “All Other Compensation” columns of the Summary Compensation Table: Mr. Reynal, $841,500 in fiscal 2016, $1,049,316 in fiscal 2017, $573,416 in fiscal 2018, $83,485 in fiscal 2019, $361,310 in fiscal 2020, and $187,612 in fiscal 2021; Mr. Kini, $207,607 in fiscal 2020, and $286,810 in fiscal 2021; Mr. Schiesl, $65,536 in 2016, $114,162 in fiscal 2017, $50,766 in fiscal 2018, $46,000 in fiscal 2019, $98,998 in fiscal 2020, and $103,562 in fiscal 2021; and Mr. Weatherred, $20,994 in fiscal 2019, $65,422 in fiscal 2020, and $11,916 in fiscal 2021. |
(4)
| The amounts reported in this column include the following aggregate amounts for each of the following NEOs reported as compensation to such named executive officers for previous years in the “Base Salary,” “Non-Equity Incentive Plan Compensation” and “All Other Compensation” columns of the Summary Compensation Table: Mr. Reynal, $841,500 in fiscal 2016, $1,049,316 in fiscal 2017, $573,416 in fiscal 2018, $83,485 in fiscal 2019 and $361,310 in fiscal 2020; Mr. Kini, $207,607 in fiscal 2020; Mr. Schiesl, $65,536 in 2016, $114,162 in fiscal 2017, $50,766 in fiscal 2018, $46,000 in fiscal 2019 and $98,998 in fiscal 2020; and Mr. Weatherred, $20,994 in fiscal 2019 and $65,422 in fiscal 2020. |
Non-qualified Deferred Compensation Plan In addition to the 401(k) plan, U.S. employees with a salary band 8 or higher (generally senior director and above) are eligible to participate in the Supplemental Contribution Plan. The participant selects the deferral percentage for the Supplemental Contribution Plan at the time of initial enrollment in the Supplemental Contribution Plan or once per year in December for the following year. In December of each year, a participant TABLE OF CONTENTS
may make a separate election to defer from the annual MIP award earned the following year and payable in the year thereafter. The Company matches each participant’s contributions to the Supplemental Contribution Plan with Company matching contributions. The Company match consists of $1 for each $1 the participant defers under the Supplemental Contribution Plan (up to the first 6% of a participant’s annual eligible compensation), less any matching contribution made to the 401(k) plan. The Company match is credited to the Supplemental Contribution Plan in the form of cash. With respect to employee and Company matching contributions made to the Supplemental Contribution Plan on and after January 1, 2021, participants may elect to receive distributions related to each calendar year in a lump sum or 5-, 10-, or 15-year installments payable (i) when the participant separates from service with the Company or (ii) on a specific in-service date designated by the participant. For amounts deferred between January 1, 2019 and December 31, 2020, participants may elect to receive distributions in a lump sum or 5-, or 10-year installments payable (i) when the participant separates from service with the Company or (ii) on a specific in-service date designated by the participant. A participant makes these distribution elections for the specific year’s contributions at the time the participant makes the salary and MIP deferral elections in December for the following year. For amounts deferred before January 1, 2019, participants in the Supplemental Contribution Plan may elect to receive distributions of their plan account in either a lump sum or 5- or 10-year installments payable when the participant separates from service with the Company, subject to the terms and conditions of the Supplemental Contribution Plan. Loans are not permitted under the Supplemental Contribution Plan. The investment options available to participants, including the NEOs, under the Supplemental Contribution Plan are similar to those offered to all of the participants in the 401(k) plan. Because some specific investment TABLE OF CONTENTS options available under the 401(k) plan are not available under the Supplemental Contribution Plan, the Company has made similar investment options available to the Supplemental Contribution Plan participants. Our stock is not a permitted investment option under the Supplemental Contribution Plan. Potential Payments to Named Executive Officers upon Termination of Employment or Change in Control The following table describes the potential payments and benefits that would have been payable to our NEOs under existing plans and arrangements assuming a qualifying termination if a termination or change in control occurred on December 31, 2021,30, 2022, the last business day of our 20212022 fiscal year. A description of the provisions governing such payments under our agreements and any material conditions or obligations applicable to the receipt of payments is described below under “Severance Arrangements and Restrictive Covenants.” The amounts shown in the table do not include payments and benefits to the extent they are provided generally to all salaried employees upon termination of employment and do not discriminate in scope, terms or operation in favor of the NEOs. These include accrued but unpaid salary and distributions of plan balances under our 401(k) savings plan. Vicente Reynal
| | | | | | | | | | | | | | | | Qualifying Termination | | | 1,000,000 | | | 23,423 | | | ― | | | 10,386,441 | | | 11,409,863 | Change in Control (“CIC”) | | | ― | | | ― | | | ― | | | 22,419,337 | | | 22,419,337 | Qualifying Termination and CIC | | | 1,000,000 | | | 23,423 | | | ― | | | 43,337,845 | | | 44,361,268 | Vikram Kini
| | | | | | | | | | | | | | | | Qualifying Termination | | | 500,000 | | | 23,423 | | | ― | | | 1,140,782 | | | 1,664,204 | Change in Control (“CIC”) | | | ― | | | ― | | | ― | | | 1,979,469 | | | 1,979,469 | Qualifying Termination and CIC | | | 500,000 | | | 23,423 | | | ― | | | 4,450,713 | | | 4,974,136 | Andrew Schiesl
| | | | | | | | | | | | | | | | Qualifying Termination | | | 500,000 | | | 23,423 | | | ― | | | 1,605,812 | | | 2,129,235 | Change in Control (“CIC”) | | | ― | | | ― | | | ― | | | 3,178,819 | | | 3,178,819 | Qualifying Termination and CIC | | | 500,000 | | | 23,423 | | | ― | | | 6,410,380 | | | 6,933,803 | Enrique Miñarro Viseras
| | | | | | | | | | | | | | | | Qualifying Termination | | | 490,764 | | | ― | | | ― | | | 1,754,122 | | | 2,244,886 | Change in Control (“CIC”) | | | ― | | | ― | | | ― | | | 3,458,100 | | | 3,458,100 | Qualifying Termination and CIC | | | 490,764 | | | ― | | | ― | | | 7,008,488 | | | 7,499,252 |
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Name | | Cash
Severance
Payment
($)(1) | | Continuation
of Group
Health
Coverage
($)(2) | | Accrued
but
Unused
Vacation
($)(3) | | Value of
Stock Awards
and Stock
Option
Acceleration ($)(4) | | Total
($) | | Cash
Severance
Payment
($)(1) | | Continuation
of Group
Health Coverage
($)(2) | | Accrued
but
Unused
Vacation
($)(3) | | Value of
Stock Awards
and Stock
Option
Acceleration ($)(4) | | Total
($) | Vicente Reynal
| | | | | | | | | | | | Qualifying Termination | | | 1,100,000 | | 17,757 | | ― | | 6,868,922 | | 7,986,679 | Change in Control (“CIC”) | | | ― | | ― | | ― | | 60,727,249 | | 60,727,249 | Qualifying Termination and CIC | | | 1,100,000 | | 17,757 | | ― | | 85,053,483 | | 86,171,240 | Vikram Kini
| | | | | | | | | | | | Qualifying Termination | | | 525,000 | | 6,666 | | ― | | 827,280 | | 1,358,946 | Change in Control (“CIC”) | | | ― | | ― | | ― | | 3,447,455 | | 3,447,455 | Qualifying Termination and CIC | | | 525,000 | | 6,666 | | ― | | 5,001,177 | | 5,532,843 | Enrique Miñarro Viseras
| | | | | | | | | | | | Qualifying Termination | | | 505,000 | | ― | | ― | | 921,917 | | 1,426,917 | Change in Control (“CIC”) | | | ― | | ― | | ― | | 3,359,884 | | 3,359,884 | Qualifying Termination and CIC | | | 505,000 | | ― | | ― | | 4,980,772 | | 5,485,772 | Andrew Schiesl
| | | | | | | | | | | | Qualifying Termination | | | 500,000 | | 17,277 | | ― | | 1,082,521 | | 1,599,798 | Change in Control (“CIC”) | | | ― | | ― | | ― | | 3,102,292 | | 3,102,292 | Qualifying Termination and CIC | | | 500,000 | | 17,277 | | ― | | 4,827,805 | | 5,345,082 | Michael Weatherred
| | | | | | | | | | | | | | | | | | | | | Qualifying Termination | | 415,000 | | 23,423 | | ― | | 930,775 | | 1,369,197 | | 430,000 | | 11,757 | | ― | | 506,214 | | 947,971 | Change in Control (“CIC”) | | ― | | ― | | ― | | 2,342,213 | | 2,342,213 | | ― | | ― | | ― | | 2,303,546 | | 2,303,546 | Qualifying Termination and CIC | | 415,000 | | 23,423 | | ― | | 3,746,124 | | 4,184,546 | | 430,000 | | 11,757 | | ― | | 3,948,660 | | 4,390,417 |
(1)
| Cash severance payment includes the following: |
Messrs. Reynal, Kini, Schiesl, and Weatherred - continued payment in substantially equal monthly installments over a 12-month period of their respective annual base salaries. Mr. Miñarro Viseras - twelve months' notice in the event of his termination, with the option to terminate him immediately with a lump sum payment of twelve months' salary (for the purposes of this table, salary converted to U.S. dollars at an exchange rate of 1.1357, which was the 5-year average exchange rate as of December 31, 2020).salary. (2)
| With respect to Messrs. Reynal, Kini, Schiesl, and Weatherred, reflects the cost of providing continued group health coverage (on the same basis as actively employed employees of the Company), subject to the executive's electing to receive benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), for a period of 12 months, assuming 20212022 rates. |
(3)
| Amounts reported in this column reflect zero accrued but unused vacation days for each of our NEOs. |
(4)
| Unvested PSUs, RSUs and Options granted to our NEOs since 2018 vest and, in the case of options, become immediately exercisable upon a termination without “cause”Cause (as defined below) within two years of a Change in Control. See “Treatment of Outstanding Equity Awards in the Event of Termination of Employment or Change in Control―Equity awards granted since 2018-2020”2018-2022” below. For purposes of the amounts reported in this table in respect of Mr. Reynal’s Adjusted EPS PSU award, we have assumed that, as of December 30, 2022, there were four completed fiscal quarters during the EPS Performance Period applicable to such award. |
TABLE OF CONTENTS Severance Arrangements and Restrictive Covenants Under the terms of Mr. Reynal’s employment agreement, Messrs. Reynal’s, Schiesl’s and Weatherred’s offer letters, and the severance terms applicable to Mr. Kini, if the Company terminates their employment without “cause” or any of them terminates their employment for “good reason” (as such terms are defined in the applicable employment agreement or severance terms), subject to certain conditions and on-going commitments, they will be entitled to receive: Continued payment over a 12-month period (the “Severance Period”) of their then-current annual base salary, payable in substantially equal monthly installments over the Severance Period; and Continued group health coverage (on the same basis as actively employed employees of the Company), subject to the NEO’s electing to receive benefits under COBRA, for 12 months following the date his employment terminates (or, if earlier, through the date the NEO becomes employed by another employer and eligible for health insurance coverage at such employer). Under ourthe employment agreement with Mr. Miñarro Viseras that was in effect on December 30, 2022, we are required to provide him 12 months’ notice in the event of his termination, with the option to terminate him immediately with a lump sum payment of 12 months’ salary. For more details of these agreements, see “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards in 2021―2022― Summary of NEO Offer Letters and Employment Agreements.” In addition to the payments described above, each of our NEOs is entitled to receive a distribution of all vested amounts under our Supplemental Contribution Plan. See “―Non-Qualified Deferred Compensation Fiscal 2021.2022.” Treatment of Outstanding Equity Awards in the Event of Termination of Employment or Change in Control The outstanding RSU and option awards we have granted to our NEOs provide for accelerated vesting in the event of certain qualifying terminations of employment as described below and/or, in certain circumstances described below, in connection with a change in control. Annual Equity awards granted prior to our initial public offeringAwards Effect of Change in Control on Expiration of Vested Options. As of December 31, 2021, all equity awards granted prior to our initial public offering have vested. Except as provided in the Management Stockholder’s Agreement described below under “Transactions with Related Persons—Arrangements with Our Executive Officers, Directors and Advisors—Management, Director and Advisor Stockholder’s Agreements,” all vested
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options will expire upon the earliest to occur of the following events: (1) the tenth anniversary of the date such options were granted, so long as the NEO remains employed with the Company through such date; (2) the first anniversary of the termination of the NEO’s employment with the Company because of death or Disability (as defined in the option award agreement); (3) one hundred eighty (180) days after the termination of the NEO’s employment with the Company without “cause” (as defined in the option award agreement) (except due to death or Disability) or the NEO’s resignation for “good reason” (as defined in the option award agreement); (4) the date the NEO’s employment is terminated by the Company for “cause;” or (5) thirty (30) days after the NEO’s employment is terminated by the NEO without “good reason.” In addition, at the discretion of the Company, options may be cancelled at the effective date of a merger, consolidation, or other transaction or capital change of the Company, in accordance with the terms of the 2013 Stock Incentive Plan, in exchange for a payment (payable in cash or other consideration depending on the terms of the transaction) per share equal to the excess, if any, of (x) the per share consideration paid to stockholders of the Company in the transaction over (y) the exercise price of the option.
Equity awards granted 2018-2021
Effect of Qualifying Termination on Vesting of PSUs, RSUs, and Options. In the event of an NEO’s termination without Cause (as defined below) or Approved Retirement (as defined below), such NEO’s outstanding RSUs and options that would have vested on the first vesting date otherwise scheduled to occur immediately following the date of such termination without Cause or Approved Retirement will vest as of the date of such termination without Cause or Approved Retirement, as applicable. In the event of an NEO’s death or Disability (as defined in the 2017 Omnibus Incentive Plan), such NEO’s outstanding RSUs and options that would have vested on the first and second vesting date otherwise scheduled to occur immediately following the date of such death or Disability shall vest as of the date of death or Disability. Notwithstanding the foregoing, if the Company receives a legal opinion that there has been a legal judgment and/or legal development in the NEO’s jurisdiction that would likely result in the favorable treatment that applies to the RSUs and options if the NEO’s termination occurs as a result of NEO’s Approved Retirement being deemed unlawful and/or discriminatory, the Company may determine that the NEO’s Retirement (as defined below) is no longer an Approved Retirement. In the event of an NEO’s termination without Cause, Approved Retirement or death or Disability occurring after the expiration of the Performance Period and before the vesting date, the PSUs that would have vested on the vesting date will vest on the vesting date. Effect of a Change in Control on Vesting of PSUs, RSUs, and Options. In the event of an NEO’s termination without Cause during the two-year period following a Change in Control (as defined in our 2017 Omnibus Incentive Plan), all of such NEO’s outstanding RSUs and options will immediately vest as of the date of such termination without Cause. With respect to the PSUs, if a Change in Control occurs during the Performance Period, then the calculation of the number of PSUs that will vest is conducted as though (i) the last day of the Performance Period was the TABLE OF CONTENTS date of the Change in Control and (ii) the Company’s stock price at the end of the Performance Period was the price per share of the Company’s common stock payable in connection with such Change in Control. The number of PSUs resulting from such calculation will be the number that will vest upon the consummation of such Change in Control. For purposes of the foregoing: “Approved Retirement,” “Cause,” “Detrimental Activity,” and “Retirement” have the definitions set forth in the relevant grant agreement or the 2017 Omnibus Incentive Plan, as applicable. CEO Performance-Based Leadership Equity Incentive Award Effect of Qualifying Termination or Termination due to Death or Disability on Vesting of the Adjusted EPS PSUs Vesting of the Adjusted EPS PSUs is subject to Mr. Reynal’s continued employment through December 31, 2026; however, if he is terminated by the Company without Cause or he resigns for Good Reason (each, a “Qualifying Termination” and as defined in his employment agreement) or he dies or becomes permanently disabled, in each case, after the expiration of the EPS Performance Period and before the date on which the Compensation Committee certifies the level of performance achieved (the “EPS PSU Vesting Date”), he remains entitled to receive the number of Adjusted EPS PSUs that the Compensation Committee certifies has become vested. If Mr. Reynal dies, becomes permanently disabled or experiences a Qualifying Termination prior to the end of the EPS Performance Period, the calculation to determine the number of Adjusted EPS PSUs, if any, that will become vested will be conducted as though (i) the last day of the EPS Performance Period was the date on which such termination occurs and (ii) the Company’s Adjusted EPS will be the Adjusted EPS for the last four completed fiscal quarters during the EPS Performance Period prior to the date of such termination (or, if there are not four completed fiscal quarters at the time of such termination, then all of the Adjusted EPS PSUs will be forfeited on the date of such termination) and, if the reason for such termination is a Qualifying Termination, the number of Adjusted EPS PSUs that will become vested will be prorated by the number of days Mr. Reynal was employed during the EPS Performance Period. Effect of a Change in Control on Vesting of the Adjusted EPS PSUs If a change in control (as defined in the 2017 Omnibus Incentive Plan) occurs following the expiration of the EPS Performance Period but prior to the EPS PSU Vesting Date, then the Adjusted EPS PSUs will vest on the closing of such change in control based on the achievement of Adjusted EPS in accordance with the table above under “Potential Payments to Named Executive Officers upon Termination of Employment or Change in Control” so long as Mr. Reynal has remained in continuous employment with the Company through such change in control. If a change in control occurs during the EPS Performance Period and the award is not assumed, then the calculation to determine the number of Adjusted EPS PSUs that will become eligible to vest will be conducted as though (i) the last day of the EPS Performance Period was the date of the change in control and (ii) the Company’s Adjusted EPS will be measured based on the last four completed fiscal quarters (or, if there are not four completed fiscal quarters at the time of such change in control, then all of the Adjusted EPS PSUs will be forfeited upon the change in control). The number of Adjusted EPS PSUs, if any, resulting from such calculation will become vested on the closing of the change in control so long as Mr. Reynal has remained continuously employed through such change in control. If a change in control occurs prior to the expiration of the EPS Performance Period and the award is assumed by the successor to the Company, and Mr. Reynal is subsequently terminated due to death, permanent disability or a Qualifying Termination following such change in control but prior to the end of the EPS Performance Period, the Adjusted EPS PSUs will become vested in full on the date of such termination. Effect of Qualifying Termination or Termination due to Death or Disability on Vesting of the TSR PSUs If the TSR Target Price is achieved prior to the end of the TSR Performance Period and Mr. Reynal is terminated due to his death or permanent disability prior to the expiration of such performance period, then all of the TSR PSUs will vest upon such termination. If the TSR Target Price is achieved prior to the end of the TSR Performance Period and Mr. Reynal experiences a Qualifying Termination prior to the end of the TSR TABLE OF CONTENTS Performance Period, then he will vest pro-rata in a number of TSR PSUs based on the number of days he was employed with the Company during the TSR Performance Period. The TSR Target Price has not been achieved as of the date hereof so all the TSR PSUs would have been forfeited by Mr. Reynal if his employment had terminated due to one of the above-described events on December 30, 2022. Effect of a Change in Control on Vesting of the TSR PSUs If a change in control occurs following the date on which the TSR Target Price is achieved, then all of the TSR PSUs will become fully vested immediately prior to such change in control subject to Mr. Reynal’s continued employment through such change in control. Subject to Mr. Reynal’s continued employment through such change in control, if a change in control occurs during the TSR Performance Period and prior to the date on which the TSR Target Price is achieved, and the award is not assumed by the successor to the Company, then the TSR Performance Period will end on the date of the change in control and (i) if the sum of (A) the price per share of the Company’s common stock payable in connection with such change in control, plus (B) the cumulative value of any dividends paid during the TSR Performance Period through and including the date of the change in control equals or exceeds the TSR Target Price, the TSR PSUs will vest immediately prior to the closing of such change in control, and (ii) if such sum is less than the TSR Target Price, all of the TSR PSUs will automatically be forfeited immediately prior to the closing of such change in control. If a change in control had occurred on December 30, 2022 and the TSR PSUs were not assumed by the successor to the Company, no vesting of the TSR PSUs would have occurred based on the application of the above-described formula. If a change in control occurs prior to the date on which the TSR Target Price is achieved and the TSR PSUs are assumed by the successor to the Company and Mr. Reynal is terminated due to death, permanent disability or a Qualifying Termination following such change in control but prior to the end of the TSR Performance Period, the TSR PSUs will become fully vested on the date of such termination. Effect of Qualifying Termination on Vesting of the Performance-Conditioned Stock Option Grants If Mr. Reynal experiences a Qualifying Termination or he dies or becomes permanently disabled, the number of shares subject to the stock options that will become vested on the date of such termination will be determined as if the stock options had instead vested 20% per year over five years and, solely in the event of a termination due to his death or permanent disability, Mr. Reynal will become immediately vested in an additional 20% of the stock options. Effect of a Change in Control on Vesting of the Performance-Conditioned Stock Option Grants If a change in control occurs and the stock options are not assumed, then the stock options will become vested in full immediately prior to the change in control. If the stock options are assumed by the successor to the Company, and Mr. Reynal is subsequently terminated due to death, disability or a Qualifying Termination, the stock options will become fully vested on the date of such termination. TABLE OF CONTENTS Director Compensation in Fiscal 20212022Name | | Fees Earned or
Paid in Cash
($) | | Stock
Awards
($)(1) | | Option
Awards
($)(2) | | Total ($) | | Fees Earned or
Paid in Cash
($) | | Stock
Awards
($)(1) | | Option
Awards
($)(2) | | Total
($) | Kirk E. Arnold | | 77,500 | | 175,000 | | ― | | 252,500 | | 75,000 | | 190,000 | | ― | | 265,000 | Elizabeth Centoni(3) | | 75,000 | | 175,000 | | ― | | 250,000 | | 75,000 | | 175,000 | | ― | | 250,000 | William P. Donnelly | | 100,000 | | 175,000 | | (2) | | 375,000 | | 75,000 | | 235,000 | | (2) | | 310,000 | Gary D. Forsee | | 85,000 | | 175,000 | | ― | | 260,000 | | 75,000 | | 185,000 | | ― | | 260,000 | John Humphrey | | 100,000 | | 175,000 | | ― | | 375,000 | | 75,000 | | 200,000 | | ― | | 275,000 | Marc E. Jones | | 81,250 | | 175,000 | | ― | | 256,250 | | 75,000 | | 190,000 | | ― | | 265,000 | Vicente Reynal | | ― | | ― | | ― | | ― | | ― | | ― | | ― | | ― | Peter M. Stavros(3) | | ― | | ― | | ― | | ― | | Joshua T. Weisenbeck(3) | | ― | | ― | | ― | | ― | | Mark Stevenson | | | 37,500 | | 87,500 | | ― | | 125,000 | Michael Stubblefield | | | 37,500 | | 92,500 | | ― | | 130,000 | Tony L. White | | 75,000 | | 175,000 | | ― | | 250,000 | | 75,000 | | 175,000 | | ― | | 250,000 |
(1)
| Represents the aggregate grant date fair value of stock awards granted during 20212022 computed in accordance with FASB ASC Topic 718. The aggregate number of RSUs outstanding as of December 31, 20212022 for each director was as follows: Ms. Arnold: 3,578; Ms. Centoni: 3,296; Mr. Donnelly: 4,426; Mr. Forsee: 3,484; Mr. Humphrey: 3,767; Mr. Jones: 3,578; Mr. Stevenson: 1,757; Mr. Stubblefield: 1,857; and Mr. White: 3,296. The RSUs of Mses. Arnold and Centoni and Messrs. Donnelly, Forsee, Humphrey, Jones, and White was 3,839. These restricted stock units vested in full on February 23, 2022.22, 2023. The RSUs of Messrs. Stevenson and Stubblefield are scheduled to vest in full on August 5, 2023. |
(2)
| In May 2017, we granted 44,799 time-vesting options to Mr. Donnelly (the “Donnelly Time Options”) to purchase shares of our common stock at an exercise price of $20.00 per share. All of the Donnelly Time Options are fully vested and exercisable. |
(3)
| Messrs. Stavros and WeisenbeckMs. Centoni resigned from our Board of Directors in November 2021. In connection with their resignations, the Company reduced the size ofFebruary 2023. Ms. Hartsock was appointed to the Board from ten to eight directors.of Directors, effective as of January 2023. |
Description of Director Compensation This section contains a description of the material terms of our compensation arrangements for our non-employee directors in 2021.
Former Directors Associated with KKR
Our former non-employee directors associated with Kohlberg Kravis and Roberts & Co. L.P. (“KKR”), Messrs. Stavros and Weisenbeck, received no compensation for their service on our Board of Directors in 2021.
Messrs. Donnelley, Forsee, Humphrey, Jones and White and Mses. Arnold and Centoni
Following a competitive market assessment of non-employee director compensation conducted by Pearl Meyer in connection with the Merger, the Board adopted the following director compensation program for each of our non-employee directors not associated with KKR.directors: Annual cash retainer of $75,000, payable quarterly in arrears and prorated for any partial year of service; Annual equity award having a fair market value of $175,000, payable in RSUs, which vests on the anniversary of the grant date; Additional annual cash retainerequity award having a fair market value of $25,000, payable quarterly in arrears,RSUs, which vests on the anniversary of the grant date, for serving as the chairperson of our Audit Committee and an additional annual equity award having a fair market value of $10,000, annual cash retainer, payable quarterly in arrears,RSUs, which vests on the anniversary of the grant date, for serving as a member of such committee, prorated, in each case, for any partial year of service; Additional annual cash retainerequity award having a fair market value of $15,000, payable quarterly in arrears,RSUs, which vests on the anniversary of the grant date, for serving as the chairperson of our Compensation Committee, Nominating and Corporate Governance Committee or our Sustainability Committee, prorated, in each case, for any partial year of service; and AnAdditional annual equity award having a fair market value of $175,000,$35,000, payable in RSUs, which vests on the anniversary of the grant date.date, to compensate our Lead Director, if applicable, for the additional time and responsibilities associated with this role.
Our directors wereare not paid any fees for attending meetings, however, our directors are reimbursed for reasonable travel and related expenses associated with attendance at Board or committee meetings. Effective as of January 1, 2022, the retainer amounts described above for serving as a member or chairperson of our Board committees will be paid in the form of RSUs. Additionally, our Lead Director, Mr. Donnelly, will receive an annual equity award having a fair market value of $35,000, payable in RSUs,
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which vests on the anniversary of the grant date, to compensate him for the additional time and responsibilities associated with this role. We believe that an equity-focused compensation scheme for our directors strengthens the alignment of interests of our directors and stockholders.
In connection with his election to our Board of Directors, Mr. Donnelly received the Donnelly Time Options, a grant of options under the 2013 Stock Incentive Plan with a fair value of $400,000, which vested and became exercisable in equal parts on December 31, 2017 and December 31, 2018. TABLE OF CONTENTS Vested Donnelly Time Options expire upon the earliest to occur of the following events: (1) the tenth anniversary of the date such options were granted; (2) the first anniversary of the cessation of Mr. Donnelly’s service to the Company because of death or Disability (as defined in the option award agreement); (3) one hundred eighty (180) days after the cessation of Mr. Donnelly’s service to the Company without Cause (as defined in the option award agreement) (except due to death or Disability); (4) the date Mr. Donnelly’s service is terminated by the Company for Cause; or (5) pursuant to the repurchase rights in the Director Stockholder’s Agreement described below. In addition, at the discretion of the Company, options may be cancelled at the effective date of a merger, consolidation, or other transaction or capital change of the Company, in accordance with the terms of the 2013 Stock Incentive Plan, in exchange for a payment (payable in cash or other consideration depending on the terms of the transaction) per share equal to the excess of (x) the per share consideration paid to stockholders of the Company in the transaction over (y) the exercise price of the option. In connection with his option awards, Mr. Donnelly became party to a Director Stockholder’s Agreement. Under the Director Stockholder’s Agreement, Mr. Donnelly is subject to covenants not to (1) disclose confidential information, (2) solicit customers and certain employees, consultants and independent contractors of the Company, (3) compete with the Company and (4) disparage the Company. Stock Ownership and Retention Policy Our directors are also subject to the stock ownership guidelines and retention policy described under “Compensation Discussion and Analysis―Other Compensation Practices and Policies that Align Our NEOs to Our Stockholders―Stock Ownership and Retention Policy.” Compensation Committee Interlocks and Insider Participation During 2021,2022, each of Messrs. Weisenbeck, Donnelly, Jones, Stevenson and JonesWhite and Ms. Arnold served on our Compensation Committee.Committee for at least a portion of the year. None of the current (including Ms. Hartsock), or in the case of Mr. Weisenbeck,Donnelly, former, members of our Compensation Committee has at any time been one of our executive officers or employees. None of our executive officers currently serves, or has served during the last completed fiscal year, on the compensation committee or board of directors of any other entity that has one or more executive officers serving as a member of our Board of Directors or Compensation Committee. As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K (“Item 402(u)”), the Company is providing the following information regarding the relationship of the annual total compensation of Vicente Reynal, our Chief Executive Officer (“CEO”) to the median all of our employees (except Mr. Reynal), calculated in a manner consistent with Item 402(u). For 2021,2022, our last completed fiscal year: The median of the annual total compensation of all of our employees, excluding our CEO, was $51,757.$65,098. The annual total compensation of our CEO was $10,613,486.$54,505,957. Based on this information, the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all of our employees except our CEO was 205:837:1. If the significant one-time impact of the CEO’s Performance-Based Award were removed from the calculations: The annual total compensation of the CEO would have been $10,886,957. The ratio of the annual total compensation of our CEO to the median of the annual total compensation of all of our employees except our CEO would have been 167:1. The median employee identified for calculating the ratio of the CEO's annualized total compensation to that of all employees remains unchanged from the one disclosed in last year’s proxy statement. We are confident that no significant changes have been made to our employee population or compensation arrangements that would have a significant impact on our pay ratio disclosure. We determined that, as of December 31, 2021, our employee population consisted of 15,454 individuals, including full time, part time, and temporary employees. TABLE OF CONTENTS To identify our “median employee” from this employee population, we obtained annual base salary and target annual bonus information as of December 31, 2021 from our internal payroll records for each employee in TABLE OF CONTENTS
our employee population. We believe this consistently applied compensation measure reasonably reflects annual compensation across our employee base. Base salary amounts for employees located outside the United States and compensated in currencies other than U.S. dollars were converted to U.S. dollars based on the average annual exchange rate for 2021. We then ranked the resulting annual base salary plus target annual bonus amounts for all of the employees in the employee population other than our CEO to determine our median employee. Once we identified our median employee, we combined all of the elements of such employee’s compensation for 20212022 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K for the Summary Compensation Table. With respect to the annual total compensation of our CEO, we used the amount reported in the “Total” column of our Summary Compensation Table set forth above in this Proxy Statement. TABLE OF CONTENTS Pay vs. Performance (“PvP”) Disclosure
As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K (“Item 402(v)”), the Company is providing the following information regarding the relationship between the executive compensation actually paid by the Company and the financial performance of the Company over the applicable time period of the disclosure, calculated in a manner consistent with Item 402(v). Refer to the “Compensation Discussion and Analysis” section of this Proxy Statement for a discussion on how the Compensation Committee determines named executive officer pay. 2022 | | | $54,505,957 | | | $51,229,750 | | | $2,248,514 | | | $1,167,175 | | | $142.73 | | | $120.91 | | | $605 | | | $1,435 | | | $2.36 | 2021 | | | $11,367,565 | | | $26,768,202 | | | $2,287,667 | | | $4,355,177 | | | $168.73 | | | $130.16 | | | $563 | | | $1,192 | | | $2.09 | 2020 | | | $12,373,829 | | | $24,423,018 | | | $2,627,334 | | | $3,169,464 | | | $124.21 | | | $109.01 | | | ($33) | | | $934 | | | $1.28 |
(a)
| Deductions from, and additions to, total compensation in the Summary Compensation Table by year to calculate Compensation Actually Paid include: |
Summary Compensation Table (“SCT”) Total | | | $54,505,957 | | | $11,367,565 | | | $12,373,829 | | | $2,248,514 | | | $2,287,667 | | | $2,627,334 | Adjustments for Pension | | | | | | | | | | | | | | | | | | | Deduct: | | | Change in Pension Value reported in SCT | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | Add: | | | Amount added for current year service cost | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | Add: | | | Amount added for prior service cost impacting current year | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | | | n/a | Total Adjustments for Pension | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | Adjustments for Equity Awards | | | | | | | | | | | | | | | | | | | Deduct: | | | Grant date values in SCT | | | ($51,297,935) | | | ($7,454,041) | | | ($8,607,596) | | | ($1,240,928) | | | ($1,070,766) | | | ($1,943,350) | Add: | | | Year-end fair value of unvested awards granted in the current year | | | $55,421,266 | | | $11,389,717 | | | $17,782,559 | | | $1,150,403 | | | $1,636,124 | | | $2,178,885 | Add: | | | Year-over-year difference of year-end fair values for unvested awards granted in prior years | | | ($4,849,563) | | | $11,342,130 | | | $2,711,819 | | | ($643,997) | | | $1,466,034 | | | $459,596 | Add: | | | Fair values at vest date for awards granted and vested in current year | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | Add: | | | Difference in fair values between prior year-end fair values and vest date fair values for awards granted in prior years | | | ($2,549,976) | | | $122,831 | | | $162,409 | | | ($346,817) | | | $36,118 | | | ($153,000) | Deduct: | | | Forfeitures during current year equal to prior year-end fair value | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | Add: | | | Dividends or dividend equivalents not otherwise included in total compensation | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | | | $0 | Total Adjustments for Equity Awards | | | ($3,276,208) | | | $15,400,636 | | | $12,049,190 | | | ($1,081,338) | | | $2,067,510 | | | $542,130 | Compensation Actually Paid | | | $51,229,750 | | | $26,768,202 | | | $24,423,018 | | | $1,167,175 | | | $4,355,177 | | | $3,169,464 |
TABLE OF CONTENTS (b)
| The following summarizes the valuation assumptions used for stock option awards included as part of Compensation Actually Paid: |
−
| Expected life of each stock option is based on the “simplified method” using an average of the remaining vest and remaining term, as of the vest/FYE date. |
−
| Strike price is based on each grant date closing price and asset price is based on each vest/FYE closing price. |
−
| Risk free rate is based on the Treasury Constant Maturity rate closest to the remaining expected life as of the vest/FYE date. |
−
| Historical volatility is based on daily price history for each expected life (years) prior to each vest/FYE date. Closing prices provided by S&P Capital IQ are adjusted for dividends and splits. |
−
| Represents annual dividend yield on each vest/FYE date. |
(c)
| CEO Compensation Actually Paid in 2022 would have been $2,927,250 if Mr. Reynal’s special one-time Performance-Based Award was excluded from the calculation. We believe this is an appropriate alternative way to view Compensation Actually Paid in 2022 given the long-term nature of the award with vesting events occurring five to ten years after the grant date. In our view, including all of this long-term compensation as Compensation Actually Paid in a single year does not reflect the long-term nature of the award and overstates the actual compensation paid to Mr. Reynal in 2022. |
(d)
| For the non-CEO NEOs, the amounts in the table reflect the average Summary Compensation Table total compensation and average Compensation Actually Paid for the following executives by year: |
2022: Vikram Kini, Andrew Schiesl, Enrique Minarro-Viseras, Michael Weatherred 2021: Vikram Kini, Andrew Schiesl, Enrique Minarro-Viseras, Michael Weatherred 2020: Vikram Kini, Andrew Schiesl, Enrique Minarro-Viseras, Michael Weatherred, Emily Weaver
Based on the PvP table above, the Compensation Actually Paid values for our CEO and non-CEO NEOs are directionally aligned with our stock price performance – i.e, in years where stock has appreciated, Compensation Actually Paid exceeds the values reported in the Summary Compensation Table, whereas in years where stock price depreciates, Compensation Actually Paid is lower than the amounts reported in the Summary Compensation Table. There would be an even clearer correlation if Mr. Reynal’s special one-time Performance-Based Award was not included in the 2022 Compensation Actually Paid calculation.
This is not an unexpected finding. As one of the key tenets of our compensation philosophy is to deliver the majority of compensation in long-term pay, each of our NEOs’ total pay packages are comprised primarily of equity awards. As such, the Compensation Actually Paid figures will generally move in tandem with TSR.
It is also worth noting that in each of the years disclosed in the table, our total return outpaced the S&P 500 Industrials’ return over the same measurement period.
As to the financial measures displayed in the table (Net Income, Adjusted EBITDA, and Adjusted EPS), the table demonstrates consistent year-over-year improvement for each of these performance measures. Over time, we would expect that continued strong execution on these financial measures would positively influence the TSR and increase Compensation Actually Paid, driving a result that is based on pay-for-performance. Tabular List of Financial Performance Measures Linked to Compensation Actually Paid
The following financial performance measures represent, in the Company’s view, the most important financial measures used to link Compensation Actually Paid to the NEOs in 2022 to Company performance: | Adjusted EBITDA | | | Adjusted EPS | | | Free Cash Flow | | | Relative TSR vs. S&P 500 Industrials | |
The following table and accompanying footnotes set forth information regarding the beneficial ownership of our common stock as of April 20, 20222023 by: (1) each person known to us to beneficially own more than 5% of our common stock, (2) each of the named executive officers, (3) each of our directors and (4) all of our directors and executive officers as a group. As of April 20, 2022,2023, there were 406,123,328404,677,854 shares of our common stock outstanding. Beneficial ownership is determined in accordance with the rules of the SEC, and includes common stock of which that person has the right to acquire beneficial ownership within 60 days of April 20, 2022.2023. Name of beneficial owner | | Amount and
Nature of
Beneficial
Ownership | | Percent of
Common
Stock
Outstanding | | Amount and
Nature of
Beneficial
Ownership | | Percent of
Common
Stock
Outstanding | Beneficial Owners of More than 5%
| | | | | | | | | The Vanguard Group(1) | | 43,230,549 | | 10.6% | | 45,406,196 | | 11.22% | T. Rowe Price(2) | | 57,765,282 | | 14.2% | | Artisan(3) | | 22,816,001 | | 5.6% | | T. Rowe Price Investment Management, Inc.(2) | | | 50,820,205 | | 12.56% | T. Rowe Price Associates, Inc.(3) | | | 30,462,884 | | 7.53% | BlackRock, Inc.(4) | | 29,189,900 | | 7.2% | | 32,108,452 | | 7.93% | JPMorgan Chase & Co.(5) | | 24,335,011 | | 6.0% | | Directors and Named Executive Officers:
| | | | | | | | | Vicente Reynal(6)(7) | | 2,013,113 | | * | | Vikram Kini(6) | | 241,519 | | * | | Vicente Reynal(5)(6) | | | 2,210,593 | | * | Vikram Kini(5) | | | 291,028 | | * | Enrique Miñarro Viseras(5) | | | 209,113 | | * | Andrew Schiesl(6)(5) | | 139,245 | | * | | 156,523 | | * | Enrique Miñarro Viseras(6) | | 172,013 | | * | | Michael A. Weatherred(6) | | 48,148 | | * | | Michael A. Weatherred(5) | | | 81,093 | | * | Kirk E. Arnold | | 10,963 | | * | | 14,541 | | * | Elizabeth Centoni | | 14,757 | | * | | William P. Donnelly(6) | | 102,198 | | * | | William P. Donnelly(5) | | | 106,624 | | * | Gary D. Forsee | | 34,417 | | * | | 37,901 | | * | Jennifer Hartsock | | | — | | — | John Humphrey | | 18,656 | | * | | 22,423 | | * | Marc E. Jones | | 14,757 | | * | | 18,335 | | * | Mark Stevenson | | | 2,488 | | * | Michael Stubblefield | | | — | | — | Tony L. White | | 33,938 | | * | | 37,234 | | * | All directors and executive officers as a group (16 persons(6)) | | 3,043,368 | | * | | All directors and executive officers as a group (17 persons(5)) | | | 3,368,315 | | * |
(1)
| Beneficial ownership information is based on information contained in the Schedule 13G/A filed on February 10, 20229, 2023 on behalf of The Vanguard Group and its subsidiaries, Vanguard Asset Management, Limited, Vanguard Fiduciary Trust Company, Vanguard Global Advisors, LLC, Vanguard Group (Ireland) Limited, Vanguard Investments Australia, Ltd, Vanguard Investments Canada Inc., Vanguard Investments Hong Kong Limited and Vanguard Investments UK, Limited.Group. According to the schedule, included in the shares of our common stock listed above as beneficially owned by The Vanguard Group are 0 shares over which The Vanguard Group has sole voting power, 639,789566,936 shares over which The Vanguard Group has shared voting power, 41,590,21043,734,284 shares over which The Vanguard Group has sole dispositive power and 1,640,3391,671,912 shares over which The Vanguard Group has shared dispositive power. According to the schedule, The Vanguard Group’s clients, including investment companies registered under the Investment Company Act of 1940 and other managed accounts, have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the securities reported therein. No one other person’s interest in the securities reported is more than 5%. The address of the principal business office of The Vanguard Group, Inc. is 100 Vanguard Blvd., Malvern, PA 19355. |
(2)
| Beneficial ownership information is based on information contained in the Schedule 13G/A filed on February 14, 20222023 on behalf of T. Rowe Price Associates,Investment Management, Inc. (“Price Associates”T. Rowe IM”). According to the schedule, included in the shares of our common stock listed above as beneficially owned by Price Associates,T. Rowe IM, are 22,936,86616,778,175 shares over which Price AssociatesT. Rowe IM has sole voting power, 0 shares over which Price AssociatesT. Rowe IM has shared voting power, 57,765,28250,820,205 shares over which Price AssociatesT. Rowe IM has sole dispositive power and 0 shares over which Price AssociatesT. Rowe IM has shared dispositive power. According to the schedule, Price AssociatesT. Rowe IM does not serve as custodian of the assets of any of its clients; accordingly, in each instance only the client or the client’s custodian or trustee bank has the right to receive dividends paid with respect to, and proceeds from the sale of, such securities. The ultimate power to direct the receipt of dividends paid with respect to, and the proceeds from the sale of, such securities, is vested in the individual and institutional clients which Price AssociatesT. Rowe IM serves as investment adviser. Any and all discretionary authority which has been delegated to Price AssociatesT. Rowe IM may be revoked in whole or in part at any time. According to the schedule, except as may be indicated if the filing is a joint filing with one of the registered investment companies sponsored by Price Associates which it also serves as an investment adviser not more than 5% of the class of such securities is owned by any one client subject to the investment advice of Price Associates. The principal business address of Price Associates and Price Growth FundT. Rowe IM is 100 E. Pratt Street, Baltimore, MD 21202. |
(3)
| Beneficial ownership information is based on information contained in the Schedule 13G filed on February 4, 2022 by Artisan Partners Limited Partnership (“APLP”), Artisan Investments GP LLC (“Artisan Investments”), Artisan Partners Holdings LP (“Artisan Holdings”) and Artisan Partners Asset Management Inc. (“APAM”) (APLP, Artisan Investments, Artisan Holdings, and APAM, |
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collectively, “Artisan”), in which Artisan reported that it has sole voting power over 0 shares, shared voting power over 19,699,722 shares, sole dispositive power over 0 shares and shared dispositive power over 22,816,001 shares of the Company. According to the schedule, Artisan Holdings is the sole limited partner of APLP and the sole member of Artisan Investments; Artisan Investments is the general partner of APLP; APAM is the general partner of Artisan Holdings. The principal business address of each of APLP, Artisan Investments, Artisan Holdings, and APAM is 875 East Wisconsin Avenue, Suite 800 Milwaukee, WI 53202.
(4)
| Beneficial ownership information is based on information contained in the Schedule 13G/A filed on February 3, 202214, 2023 on behalf of T. Rowe Price Associates, Inc. (“T. Rowe Associates”). According to the schedule, included in the shares of our common stock listed above as beneficially owned by T. Rowe, are 11,474,551 shares over which T. Rowe Associates has sole voting power, 0 shares over which T. Rowe Associates has shared voting power, 30,462,884 shares over which T. Rowe Associates has sole dispositive power and |
TABLE OF CONTENTS 0 shares over which T. Rowe Associates has shared dispositive power. According to the schedule, T. Rowe Associates does not serve as custodian of the assets of any of its clients; accordingly, in each instance only the client or the client’s custodian or trustee bank has the right to receive dividends paid with respect to, and proceeds from the sale of, such securities. The ultimate power to direct the receipt of dividends paid with respect to, and the proceeds from the sale of, such securities, is vested in the individual and institutional clients which T. Rowe Associates serves as investment adviser. Any and all discretionary authority which has been delegated to T. Rowe Associates may be revoked in whole or in part at any time. The principal business address of T. Rowe Associates is 100 E. Pratt Street, Baltimore, MD 21202. (4)
| Beneficial ownership information is based on information contained in the Schedule 13G/A filed on February 7, 2023 by BlackRock, Inc. in which BlackRock, Inc. reported that it has sole voting power over 25,793,86129,397,076 shares, andshared voting power over 0 shares, sole dispositive power over 29,189,90032,108,452 shares held byand shared dispositive power over 0 shares. BlackRock, Inc. indicated the following subsidiaries in the schedule: BlackRock Life Limited, BlackRock International Limited, BlackRock Advisors, LLC, Aperio Group, LLC, BlackRock (Netherlands) B.V., BlackRock Institutional Trust Company, National Association, BlackRock Asset Management Ireland Limited, BlackRock Financial Management, Inc., BlackRock Japan Co., Ltd., BlackRock Asset Management Schweiz AG, BlackRock Investment Management, LLC, BlackRock Investment Management (UK) Limited, BlackRock Asset Management Canada Limited, BlackRock (Luxembourg) S.A., BlackRock Investment Management (Australia) Limited, BlackRock Advisors (UK) Limited, BlackRock Fund Advisors, BlackRock Asset Management North Asia Limited, BlackRock (Singapore) Limited and BlackRock Fund Managers Ltd. The principal business address of BlackRock, Inc. is 55 East 52nd St., New York, NY 10055. |
(5)
| Beneficial ownership information is based on information contained in the Schedule 13G filed on January 24, 2022 by JPMorgan Chase & Co. (“JPM”), in which JPM reported that it has sole voting power over 22,680,356 shares, shared voting power over 126,176, sole dispositive power over 23,925,610 shares and shared dispositive power over 400,979 shares held by J.P. Morgan Trust Company of Delaware, J.P. Morgan Securities LLC, JPMorgan Chase Bank, National Association, JPMorgan Asset Management (ASIA PACIFIC) Limited, JPMorgan Asset Management (UK) Limited, J.P.Morgan (Suisse) SA, J.P. Morgan Investment Management Inc., JPMorgan Asset Management (Japan) Limited, J.P. Morgan Private Investments Inc. The principal business address of JPM is 383 Madison Avenue New York, NY 10179. |
(6)
| The number of shares reported includes shares covered by options that are currently exercisable within 60 days and RSUs that vest within 60 days as follows: Mr. Reynal, 1,662,979;1,840,245; Mr. Gillespie, 93,821;111,961; Ms. Hepding, 7,983; Ms. Keene, 9,442; Mr. Kendall-Jones, 67,246;13,565; Mr. Kini, 221,396;243,846; Mr. Schiesl, 60,949;88,728; Mr. Miñarro Viseras, 147,313;177,342; Mr. Weatherred, 35,471;48,273; Mr. Donnelly, 44,799; all directors and executive officers as a group, 2,343,416.2,576,742. |
(7) (6)
| The number of shares reported includes 75,000 shares held in a trust for the benefit of Mr. Reynal’s descendants, 153,230171,802 shares held in a trust for the benefit of Mr. Reynal and his spouse and 22,500 shares held in a trust for the benefit of Mr. Reynal’s spouse and descendants. |
DELINQUENT SECTION 16(a)16(A) REPORTS Section 16(a) of the 1934 Act requires the Company’s Directors and certain officers, as well as persons who beneficially own more than 10% of the outstanding shares of Common Stock, to file reports regarding their initial stock ownership and subsequent changes to their ownership with the SEC. Based solely on a review of the reports filed for fiscal year 20212022 and the period through the date hereof and related written representations and except as previously reported, we believe that all Section 16(a) reports were filed on a timely basis, except as follows: (i) for Elizabeth Meloy Hepding, a Form 5 for Mr. Reynal relating to an estate planning transfer which was filed late Form 3 filing and a late Form 4 filing relateddue to a grant of RSUs and stock options, (ii) for Kathleen M. Keene, a late Form 4 filing related to a grant of RSUs and stock options, (iii) for Michael J. Scheske, a timely filed Form 4 that inadvertently reported an incorrect number of shares underlying a grant of RSUs and stock options, in each case, due toCompany administrative oversight and (iv) for Vikram Kini, a timely filed Form 4 that inadvertently reported an incorrect balance of shares held due to an administrative computational error.oversight. TABLE OF CONTENTS TRANSACTIONS WITH RELATED PERSONS Arrangements with KKR, a Former Related Party
Affiliates of KKR served on the Company’s board of directors until November 2021Since January 1, 2022, there were no “related person transactions” requiring disclosure under SEC rules and KKR maintained an equity interest above 5% in the Company until August 2021. KKR did not own any shares of common stock as of December 31, 2021.regulations.
As a result, KKR is no longer considered a related party of the Company covered by Item 403(a) of Regulation S-K.
However, KKR was a greater than 5% holder and thus a related party of the Company during the year ended December 31, 2021, and at the time that the following transactions and arrangements were in effect, which therefore requires such transactions and arrangements to be reported in this Proxy Statement.
Secondary Offering
On August 6, 2021, KKR completed a secondary offering to sell its remaining 29,788,635 shares of common stock, of which Ingersoll Rand purchased 14,894,317 shares for $49.05 per share (the “Final Offering”).
Resignation of KKR Nominated Board Members
As a result of the Final Offering, Messrs. Stavros and Weisenbeck resigned from our Board in November 2021 and there are no KKR nominated directors serving on our Board. In connection with their resignations, the Company reduced the size of the Board from ten to eight directors.
Termination of Stockholders Agreement and Registration Rights Agreement
In connection with our initial public offering, we entered into a stockholders agreement with certain affiliates of KKR, which stockholders agreement was subsequently amended on April 30, 2019, in connection with the Merger, and provided KKR with certain director nomination rights. In connection with our acquisition by KKR on July 30, 2013 (the “KKR Transaction”), certain affiliates of KKR entered into a registration rights agreement with us. In connection with the completion of our initial public offering, we and KKR entered into an amended and restated registration rights agreement. These agreements are no longer in effect as of the Final Offering. For a summary of the material terms of these agreements, see our Proxy Statement filed with the SEC on April 29, 2021, under “Transactions with Related Persons―Arrangements with KKR.”
Indemnification Agreement
In connection with the KKR Transaction, we also entered into a separate indemnification agreement with KKR and certain of its affiliates, which provides customary exculpation and indemnification provisions in favor of KKR and such affiliates in connection with the services provided to us under monitoring, transaction fee and syndication fee agreements we entered into with KKR or otherwise.
Policies and Procedures for Related Person Transactions Our Board of Directors has adopted a written statement of policy regarding transactions with related persons, which we refer to as our “related person transaction policy.” Our related person transaction policy requires that (a) any “related person transaction” (defined as any transaction that is anticipated would be reportable by us under Item 404(a) of Regulation S-K in which we were or are to be a participant and the amount involved exceeds $120,000 and in which any related person had or will have a direct or indirect material interest) be approved or ratified by an approving body comprised of the disinterested members of our Board of Directors or any committee of the Board of Directors (provided that a majority of the members of the Board of Directors or such committee, respectively, are disinterested) and (b) any employment relationship or transaction involving an executive officer and any related compensation be approved by the Compensation Committee of the Board of Directors or recommended by the Compensation Committee to the Board of Directors for its approval. In connection with the review and approval or ratification of a related person transaction: management must disclose to the committee or disinterested directors, as applicable, the name of the related person and the basis on which the person is a related person, the material terms of the related person transaction, including the approximate dollar value of the amount involved in the transaction, and all the material facts as to the related person’s direct or indirect interest in, or relationship to, the related person transaction; TABLE OF CONTENTS
management must advise the committee or disinterested directors, as applicable, as to whether the related person transaction complies with the terms of our agreements governing our material outstanding indebtedness that limit or restrict our ability to enter into a related person transaction; management must advise the committee or disinterested directors, as applicable, as to whether the related person transaction will be required to be disclosed in our applicable filings under the Securities Act or the Exchange Act, and related rules, and, to the extent required to be disclosed, management must ensure that the related person transaction is disclosed in accordance with such Acts and related rules; and management must advise the committee or disinterested directors, as applicable, as to whether the related person transaction constitutes a “personal loan” for purposes of Section 402 of the Sarbanes-Oxley Act of 2002. In addition, the related person transaction policy provides that the committee or disinterested directors, as applicable, in connection with any approval or ratification of a related person transaction involving a non-employee director or director nominee, should consider whether such transaction would compromise the director or director nominee’s status as an “independent” or “non-employee” director, as applicable, under the rules and regulations of the SEC and the NYSE. TABLE OF CONTENTS STOCKHOLDER PROPOSALS FOR THE 20232024 ANNUAL MEETING If any stockholder wishes to propose a matter for consideration at our 2023 Annual Meeting of Stockholders, the proposal should be mailed by certified mail return receipt requested, to our Corporate Secretary, Ingersoll Rand Inc., 525 HarborHarbour Place Drive, Suite 600, Davidson, North Carolina 28036. To be eligible under the SEC’s stockholder proposal rule (Rule 14a-8(e) of the Exchange Act) for inclusion in our 2023 Annual Meeting Proxy Statement and form of proxy, a proposal must be received by our Corporate Secretary on or before December 30, 2022.2023. Failure to deliver a proposal in accordance with this procedure may result in it not being deemed timely received. In addition, our Bylaws permit stockholders to nominate directors and present other business for consideration at our Annual Meeting of Stockholders. To make a director nomination or present other business for consideration at the Annual Meeting of Stockholders to be held in 2023,2024, you must submit a timely notice in accordance with the procedures described in our Bylaws. To be timely, a stockholder’s notice shall be delivered to the Corporate Secretary at the principal executive offices of our Company not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting. Therefore, to be presented at our Annual Meeting to be held in 2023,2024, such a proposal must be received on or after February 16, 2023,2024, but not later than March 18, 2023.17, 2024. In the event that the date of the Annual Meeting of Stockholders to be held in 20232024 is advanced by more than 30 days, or delayed by more than 70 days, from the anniversary date of this year’s Annual Meeting of Stockholders, such notice by the stockholder must be so received no earlier than 120 days prior to the Annual Meeting of Stockholders to be held in 20232024 and not later than the later of the 90th day prior to such Annual Meeting of Stockholders to be held in 20232024 or ten (10) calendar days following the day on which public announcement of the date of such Annual Meeting is first made. Any such proposal will be considered timely only if it is otherwise in compliance with the requirements set forth in our Bylaws. The proxy solicited by the Board for the 20232024 Annual Meeting of Stockholders will confer discretionary authority to vote as the proxy holders deem advisable on such stockholder proposals which are considered untimely. In addition to satisfying the foregoing requirements under our Bylaws, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than our nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than April 17, 2023.16, 2024. HOUSEHOLDING OF PROXY MATERIALS SEC rules permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements and notices with respect to two or more stockholders sharing the same address by delivering a single proxy statement or a single notice addressed to those stockholders. This process, which is commonly referred to as “householding,” provides cost savings for companies by reducing printing and mailing costs and helps the environment by conserving natural resources. Some brokers household proxy materials, delivering a single proxy statement or notice to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that they will be householding materials to your address, householding will generally continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement or notice, or if your household is receiving multiple copies of these documents and you wish to request that future deliveries be limited to a single copy, please notify your broker. If your household received a single Notice of Internet Availability of Proxy Materials or, if applicable, a single set of proxy materials this year, but you would prefer to receive your own copy, please contact Broadridge Householding Department, by calling their toll free number, 1-866-540-7095 or by writing to: Broadridge, Householding Department, 51 Mercedes Way, Edgewood, NY 11717. You will be removed from the householding program within 30 days of receipt of your instructions at which time you will then be sent separate copies of the documents. TABLE OF CONTENTS The Board does not know of any other matters to be brought before the meeting. If other matters are presented, the proxy holders have discretionary authority to vote all proxies in accordance with their best judgment. By Order of the Board of Directors,
Andrew Schiesl Corporate Secretary We make available, free of charge on our website, all of our filings that are made electronically with the SEC, including Forms 10-K, 10-Q and 8-K. To access these filings, go to our website (www.irco.com)(www.irco.com) and click on “Financials―SEC Filings” under the “Investors” heading. Copies of our Annual Report on Form 10-K for the year ended December 31, 2021,2022, including financial statements and schedules thereto, filed with the SEC, are also available without charge to stockholders upon written request addressed to: Corporate Secretary
Ingersoll Rand Inc.
525 HarborHarbour Place Drive, Suite 600
Davidson, North Carolina 28036 TABLE OF CONTENTS Reconciliation of GAAP Measures to Non-GAAP Measures In addition to consolidated GAAP financial measures, Ingersoll Rand reviews various non-GAAP financial measures, including “Organic Revenue Growth,” “Adjusted EBITDA,” “Adjusted Net Income,” “Adjusted Diluted EPS,” “Free Cash Flow,” “Adjusted Free Cash Flow,” “Supplemental Adjusted EBITDA,” “Supplemental Adjusted Revenue” and “Supplemental Adjusted Revenue.Diluted EPS.” Ingersoll Rand believes Supplemental Adjusted EBITDA, Supplemental Adjusted Revenue and Supplemental Adjusted RevenueDiluted EPS are helpful supplemental measures to assist management and investors in evaluating the Company’s operating results as they provide supplemental information about the Company’s financial performance on a combined basis as if the Merger had occurred on January 1, 2019. Ingersoll Rand believes Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, Supplemental Adjusted EBITDA, Supplemental Adjusted Revenue and Supplemental Adjusted RevenueDiluted EPS are helpful supplemental measures to assist management and investors in evaluating the Company’s operating results as they exclude certain items that are unusual in nature or whose fluctuation from period to period do not necessarily correspond to changes in the operations of Ingersoll Rand’s business. Ingersoll Rand believes Organic Revenue Growth is a helpful supplemental measure to assist management and investors in evaluating the Company’s operating results as it excludes the impact of foreign currency and acquisitions on revenue growth. Adjusted EBITDA represents net income before interest, taxes, depreciation, amortization and certain non-cash, non-recurring and other adjustment items. Adjusted Net Income is defined as net income including interest, depreciation and amortization of non-acquisition related intangible assets and excluding other items used to calculate Adjusted EBITDA and further adjusted for the tax effect of these exclusions. Organic Revenue Growth is defined as As Reported Revenue growth less the impacts of Foreign Currency and Acquisitions. Ingersoll Rand believes that the adjustments applied in presenting Adjusted EBITDA and Adjusted Net Income are appropriate to provide additional information to investors about certain material non-cash items and about non-recurring items that the Company does not expect to continue at the same level in the future. Adjusted Diluted EPS is defined as Adjusted Net Income divided by Adjusted Diluted Average Shares Outstanding. Ingersoll Rand uses Free Cash Flow and Adjusted Free Cash Flow to review the liquidity of its operations. Ingersoll Rand measures Free Cash Flow as cash flows from operating activities less capital expenditures and Adjusted Free Cash Flow as cash flows from operating activities less capital expenditures and other adjustments. Ingersoll Rand believes Free Cash Flow and Adjusted Free Cash Flow are useful supplemental financial measures for management and investors in assessing the Company’s ability to pursue business opportunities and investments and to service its debt. Free Cash Flow and Adjusted Free Cash Flow are not measures of our liquidity under GAAP and should not be considered as an alternative to cash flows from operating activities. Supplemental Adjusted EBITDA represents Adjusted EBITDA as if the Merger had occurred on January 1, 2019. Ingersoll Rand believes that the adjustments applied in presenting Adjusted EBITDA and Supplemental Adjusted EBITDA are appropriate to provide additional information to investors about certain material non-cash items and about non-recurring items that the Company does not expect to continue at the same level in the future. Supplemental Adjusted Revenue represents revenue for the Company as if the Merger had occurred on January 1, 2019. Supplemental Adjusted Diluted EPS is defined as Adjusted Net Income divided by Adjusted Diluted Average Shares Outstanding as if the Merger had occurred on January 1, 2019. Management and Ingersoll Rand’s board of directors regularly use these measures as tools in evaluating the Company’s operating and financial performance and in establishing discretionary annual compensation. Such measures are provided in addition to, and should not be considered to be a substitute for, or superior to, the comparable measures under GAAP. In addition, Ingersoll Rand believes that Organic Revenue Growth, Adjusted EBITDA, isAdjusted Net Income, Adjusted Diluted EPS, Free Cash Flow and Adjusted Free Cash Flow are frequently used by investors and other interested parties in the evaluation of issuers, many of which also present Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, Free Cash Flow and Adjusted Free Cash Flow when reporting their results in an effort to facilitate an understanding of their operating and financial results and liquidity. Organic Revenue Growth, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, Free Cash Flow, Adjusted Free Cash Flow, Supplemental Adjusted EBITDA, Supplemental Adjusted EBITDARevenue and Supplemental Adjusted RevenueDiluted EPS should not be considered as alternatives to net income, diluted earnings per share or any TABLE OF CONTENTS other performance measure derived in accordance with GAAP.GAAP, or as alternatives to cash flow from operating activities as a measure of our liquidity. Organic Revenue Growth, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, Free Cash Flow, Adjusted Free Cash Flow, Supplemental Adjusted EBITDA, Supplemental Adjusted EBITDARevenue and Supplemental Adjusted RevenueDiluted EPS have limitations as analytical tools, and you should not consider such measures either in isolation or as substitutes for analyzing Ingersoll Rand’s results as reported under GAAP. Reconciliations of Organic Revenue Growth, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, Free Cash Flow, Adjusted Free Cash Flow, Supplemental Adjusted EBITDA, Supplemental Adjusted EBITDARevenue and Supplemental Adjusted RevenueDiluted EPS to their most comparable U.S. GAAP financial metrics for historical periods are presented in the tables below. TABLE OF CONTENTS INGERSOLL RAND INC. AND SUBSIDIARIES
UNAUDITED ADJUSTED COMBINED FINANCIAL INFORMATION BY SEGMENT
(DollarsUnaudited; in millions)millions, except per share amounts) Ingersoll Rand
| | | | Orders
| | | $5,764.5
| Revenues
| | | 5,152.4
| Adjusted EBITDA
| | | 1,191.9
| Adjusted EBITDA Margin
| | | 23.1%
| | | | | Industrial Technologies & Services
| | | | Orders
| | | $4,678.8
| Revenues
| | | 4,161.0
| | | | | Precision & Science Technologies
| | | | Orders
| | | $1,085.7
| Revenues
| | | 991.4
|
Ingersoll Rand
| | | | | | | Orders | | | $6,367.6 | | | $5,764.5 | Revenue | | | 5,916.3 | | | 5,152.4 | Adjusted EBITDA (non-GAAP) | | | 1,434.8 | | | 1,191.9 | Adjusted EBITDA Margin (non-GAAP) | | | 24.3% | | | 23.1% | Adjusted Diluted EPS (non-GAAP) | | | $2.36 | | | $2.09 | Free Cash Flow (non-GAAP) | | | 770.8 | | | 563.7 | Free Cash Flow Margin (non-GAAP) | | | 13.0% | | | 10.9% | | | | | | | | Industrial Technologies & Services
| | | | | | | Orders | | | $5,120.1 | | | $4,678.8 | Revenue | | | 4,705.1 | | | 4,161.0 | Segment Adjusted EBITDA | | | 1,214.0 | | | 1,033.7 | Segment Adjusted EBITDA Margin | | | 25.8% | | | 24.8% | | | | | | | | Precision & Science Technologies
| | | | | | | Orders | | | $1,247.5 | | | $1,085.7 | Revenue | | | 1,211.2 | | | 991.4 | Segment Adjusted EBITDA | | | 347.5 | | | 291.4 | Segment Adjusted EBITDA Margin | | | 28.7% | | | 29.4% |
TABLE OF CONTENTS INGERSOLL RAND INC. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN NET INCOME AND CASH FLOWS FROM OPERATING ACTIVITIES FROM CONTINUING OPERATIONS TO FREE CASH FLOW
(DollarsUnaudited; in millions) Net Income
| | | $565.0
| Less: Income from discontinued operations
| | | 121.0
| Less: Income tax provision from discontinued operations
| | | (79.4)
| Income from continuing operations, net of tax
| | | 523.4
| Plus:
| | | | Interest expense
| | | 87.7
| Provision for income taxes
| | | (21.8)
| Depreciation expense
| | | 85.1
| Amortization expense
| | | 332.9
| Restructuring and related business transformation costs
| | | 18.8
| Acquisition related expenses and non-cash charges
| | | 65.2
| Stock-based compensation
| | | 95.9
| Foreign currency transaction gains, net
| | | (12.0)
| Loss on equity method investments
| | | 11.4
| Loss on extinguishment of debt
| | | 9.0
| Adjustments to LIFO inventories
| | | 33.2
| Gain on settlement of post-acquisition contingencies
| | | (30.1)
| Other adjustments
| | | (6.8)
| Adjusted EBITDA
| | | $1,191.9
|
Net Income | | | $608.5 | | | $565.0 | Less: Income from discontinued operations | | | 0.5 | | | 121.0 | Less: Income tax benefit (provision) from discontinued operations | | | 14.7 | | | (79.4) | Income from Continuing Operations, Net of Tax | | | 593.3 | | | 523.4 | Plus:
| | | | | | | Interest expense | | | 103.2 | | | 87.7 | Provision (benefit) for income taxes | | | 149.6 | | | (21.8) | Depreciation expense | | | 81.8 | | | 85.1 | Amortization expense | | | 347.6 | | | 332.9 | Restructuring and related business transformation costs | | | 32.3 | | | 18.8 | Acquisition related expenses and non-cash charges | | | 40.7 | | | 65.2 | Stock-based compensation | | | 85.6 | | | 95.9 | Foreign currency transaction gains, net | | | (5.9) | | | (12.0) | Loss (income) on equity method investments | | | (0.7) | | | 11.4 | Loss on extinguishment of debt | | | 1.1 | | | 9.0 | Adjustments to LIFO inventories | | | 36.1 | | | 33.2 | Gain on settlement of post-acquisition contingencies | | | (6.2) | | | (30.1) | Other adjustments | | | (23.7) | | | (6.8) | Adjusted EBITDA | | | $1,434.8 | | | $1,191.9 | Minus:
| | | | | | | Interest expense | | | 103.2 | | | 87.7 | Income tax provision, as adjusted | | | 267.3 | | | 120.7 | Depreciation expense | | | 81.8 | | | 85.1 | Amortization of non-acquisition related intangible assets | | | 18.8 | | | 17.0 | Interest income on cash and cash equivalents | | | (8.0) | | | — | Adjusted Net Income | | | $971.7 | | | $881.4 | | | | | | | | Cash Flows from Operating Activities from Continuing Operations | | | 865.4 | | | 627.8 | Minus:
| | | | | | | Capital expenditures | | | 94.6 | | | 64.1 | Free Cash Flow | | | $770.8 | | | $563.7 | | | | | | | | Revenue | | | 5,916.3 | | | 5,152.4 | Free Cash Flow Margin | | | 13.0% | | | 10.9% |
TABLE OF CONTENTS INGERSOLL RAND INC. AND SUBSIDIARIES
UNAUDITED SUPPLEMENTAL RECONCILIATION OF DILUTED NET INCOME PER SHARE TO
ADJUSTED COMBINED FINANCIAL INFORMATION BY SEGMENT DILUTED EARNINGS PER SHARE
(DollarsUnaudited; in millions)millions, except per share amounts) Ingersoll Rand
| | | | | | | Supplemental Adjusted Orders | | | $4,410.4 | | | $4,829.9 | Supplemental Adjusted Revenue (non-GAAP) | | | 4,344.4 | | | 4,907.8 | Supplemental Adjusted EBITDA (non-GAAP) | | | 933.9 | | | 960.2 | Supplemental Adjusted EBITDA Margin (non-GAAP) | | | 21.5% | | | 19.6% | | | | | | | | Industrial Technologies & Services
| | | | | | | Supplemental Adjusted Orders | | | $3,576.2 | | | $3,983.0 | Supplemental Adjusted Revenue (non-GAAP) | | | 3,540.0 | | | 4,057.5 | | | | | | | | Precision & Science Technologies
| | | | | | | Supplemental Adjusted Orders | | | $834.2 | | | $846.9 | Supplemental Adjusted Revenue (non-GAAP) | | | 804.4 | | | 850.3 |
Diluted Net Income Per Share (As Reported)1 | | | $1.47 | | | $1.34 | Less: Diluted Net Income Per Share from Discontinued Operations (As Reported)1 | | | 0.04 | | | 0.10 | Diluted Net Income Per Share from Continuing Operations (As Reported)1 | | | 1.44 | | | 1.24 | Plus:
| | | | | | | Provision (benefit) for income taxes | | | 0.36 | | | (0.05) | Amortization of acquisition related intangible assets | | | 0.80 | | | 0.75 | Restructuring and related business transformation costs | | | 0.08 | | | 0.05 | Acquisition related expenses and non-cash charges | | | 0.10 | | | 0.15 | Stock-based compensation | | | 0.21 | | | 0.23 | Foreign currency transaction gains, net | | | (0.01) | | | (0.03) | Loss on equity method investments | | | — | | | 0.03 | Loss on extinguishment of debt | | | — | | | 0.02 | Adjustments to LIFO inventories | | | 0.09 | | | 0.08 | Gain on settlement of post-acquisition contingencies | | | (0.02) | | | (0.07) | Other adjustments | | | (0.06) | | | (0.02) | Minus:
| | | | | | | Income tax provision, as adjusted | | | 0.65 | | | 0.29 | Interest income on cash and cash equivalents | | | (0.02) | | | — | Adjusted Diluted Earnings Per Share2 | | | $2.36 | | | $2.09 | | | | | | | | Average shares outstanding:
| | | | | | | Basic, as reported | | | 405.3 | | | 414.8 | Diluted, as reported | | | 410.2 | | | 421.2 | Adjusted diluted2 | | | 410.2 | | | 421.2 |
1
| Basic and diluted earnings per share (as reported) are calculated by dividing net income attributable to Ingersoll Rand Inc. by the basic and diluted average shares outstanding for the respective periods. |
2
| Adjusted diluted share count and adjusted diluted earnings per share include incremental dilutive shares, using the treasury stock method, which are added to average shares outstanding. |
TABLE OF CONTENTS INGERSOLL RAND INC. AND SUBSIDIARIES
UNAUDITED RECONCILIATION OF CASH FLOW FROM OPERATING ACTIVITIES FROM CONTINUING OPERATIONS TO ADJUSTED CASH FLOW FROM OPERATING ACTIVITIES TO ADJUSTED FREE CASH FLOW
(Unaudited; in millions) Cash Flow from Operating Activities from Continuing Operations | | | $627.8 | Plus:
| | | | Synergy delivery and stand-up related costs | | | 31.3 | Cash taxes related to SVT and HPS divestitures | | | 253.7 | Settlement of post-acquisition contingencies | | | (49.5) | Adjusted Cash Flow from Operating Activities | | | 863.3 | Minus:
| | | | Capital expenditures | | | 64.1 | Adjusted Free Cash Flow | | | $799.2 | | | | | Revenue | | | $5,152.4 | Adjusted Free Cash Flow Margin | | | 15.5% |
TABLE OF CONTENTS INGERSOLL RAND INC. AND SUBSIDIARIES
REVENUE GROWTH BY SEGMENT(1)
(Unaudited) Ingersoll Rand
| | | | | | | Organic growth | | | 16.1% | | | 12.3% | Impact of foreign currency | | | (5.7%) | | | 2.6% | Impact of acquisitions | | | 4.4% | | | 3.7% | Total adjusted orders and revenue growth | | | 14.8% | | | 18.6% | | | | | | | | Industrial Technologies & Services
| | | | | | | Organic growth | | | 17.5% | | | 12.6% | Impact of foreign currency | | | (5.5%) | | | 2.7% | Impact of acquisitions | | | 1.1% | | | 2.2% | Total adjusted orders and revenue growth | | | 13.1% | | | 17.5% | | | | | | | | Precision & Science Technologies
| | | | | | | Organic growth | | | 10.3% | | | 10.9% | Impact of foreign currency | | | (6.4%) | | | 2.3% | Impact of acquisitions | | | 18.3% | | | 10.0% | Total adjusted orders and revenue growth | | | 22.2% | | | 23.2% |
(1)
| Organic growth, impact of foreign currency, and impact of acquisitions are non-GAAP measures. References to “impact of acquisitions” refer to GAAP sales from acquired businesses recorded prior to the first anniversary of the acquisition. The portion of GAAP revenue attributable to currency translation is calculated as the difference between (a) the period-to-period change in revenue (excluding acquisition sales) and (b) the period-to-period change in revenue (excluding acquisition sales) after applying prior year foreign exchange rates to the current year period. |
TABLE OF CONTENTS INGERSOLL RAND INC. AND SUBSIDIARIES
SUPPLEMENTAL ADJUSTED COMBINED FINANCIAL INFORMATION BY SEGMENT
(Unaudited; in millions) Ingersoll Rand
| | | | | | | Supplemental Adjusted Orders | | | $4,410.4 | | | $4,829.9 | Supplemental Adjusted Revenue (non-GAAP) | | | 4,344.4 | | | 4,907.8 | Supplemental Adjusted EBITDA (non-GAAP) | | | 933.9 | | | 960.2 | Supplemental Adjusted EBITDA Margin (non-GAAP) | | | 21.5% | | | 19.6% | | | | | | | | Industrial Technologies & Services
| | | | | | | Supplemental Adjusted Orders | | | $3,576.2 | | | $3,983.0 | Supplemental Adjusted Revenue (non-GAAP) | | | 3,540.0 | | | 4,057.5 | | | | | | | | Precision & Science Technologies
| | | | | | | Supplemental Adjusted Orders | | | $834.2 | | | $846.9 | Supplemental Adjusted Revenue (non-GAAP) | | | 804.4 | | | 850.3 |
TABLE OF CONTENTS INGERSOLL RAND INC. AND SUBSIDIARIES
SUPPLEMENTAL ADJUSTED COMBINED FINANCIAL INFORMATION
RECONCILIATION OF GAAP REVENUE TO SUPPLEMENTAL ADJUSTED REVENUE BY SEGMENT AND FOR THE COMPANY
(DollarsUnaudited; in millions) Segment
| | | | | | | | | | | | | | | | | | | Industrial Technologies & Services | | | $3,248.2 | | | $291.8 | | | $3,540.0 | | | $1,700.9 | | | $2,356.6 | | | $4,057.5 | Precision & Science Technologies | | | 725.0 | | | 79.4 | | | 804.4 | | | 316.6 | | | 533.7 | | | 850.3 | Total Company | | | $3,973.2 | | | $371.2 | | | $4,344.4 | | | $2,017.5 | | | $2,890.3 | | | $4,907.8 |
(1)
| For the year ended December 31, 2020, the “Adjustments” column represents the impact of two months (January and February of 2020) of standalone legacy Ingersoll Rand Industrial Segment activity. As it relates to adjustments to Segment Adjusted EBITDA, these amounts are impacted by the merged Company's corporate costs, a portion of which is allocated to the business segments. |
(2)
| For the year ended December 31, 2019, the “Adjustments” column represents the impact of one full year of 2019 standalone legacy Ingersoll Rand Industrial Segment activity. As it relates to adjustments to Segment Adjusted EBITDA, these amounts are impacted by the newly merged Company's corporate costs, a portion of which is allocated to the business segments. |
TABLE OF CONTENTS INGERSOLL RAND INC. AND SUBSIDIARIES
UNAUDITED SUPPLEMENTAL ADJUSTED COMBINED FINANCIAL INFORMATION
RECONCILIATION OF GAAP NET INCOME (LOSS) TO ADJUSTED EBITDA
AND SUPPLEMENTAL ADJUSTED EBITDA
(DollarsUnaudited; in millions) | | | For the Twelve Month Period
Ended December 31, | | | For the Twelve Months
Ended December 31, | | | | 2020 | | 2019 | | | 2020 | | 2019 | Net Income (Loss) (GAAP)
| | $(32.4) | | $159.1 | | $(32.4) | | $159.1 | Less: Income from discontinued operations | | 26.0 | | 80.7 | | 26.0 | | 80.7 | Less: Income tax provision from discontinued operations | | (1.6) | | (18.9) | | (1.6) | | (18.9) | Income (loss) from continuing operations, net of tax | | (56.8) | | 97.3 | | (56.8) | | 97.3 | Plus(1):
| | | | | | | | | Interest expense | | 111.1 | | 88.4 | | 111.1 | | 88.4 | Provision for income taxes | | 11.4 | | 12.9 | | 11.4 | | 12.9 | Depreciation expense | | 75.3 | | 41.2 | | 75.3 | | 41.2 | Amortization expense | | 335.1 | | 105.3 | | 335.1 | | 105.3 | Impairment of intangible assets | | 19.9 | | — | | 19.9 | | — | Restructuring and related business transformation costs | | 88.0 | | 19.6 | | 88.0 | | 19.6 | Acquisition related expenses and non-cash charges | | 181.5 | | 54.6 | | 181.5 | | 54.6 | Stock-based compensation | | 47.0 | | 20.2 | | 47.0 | | 20.2 | Foreign currency transaction losses, net | | 18.6 | | 7.3 | | 18.6 | | 7.3 | Loss on extinguishment of debt | | 2.0 | | 0.2 | | 2.0 | | 0.2 | Shareholder litigation settlement recoveries | | — | | (6.0) | | — | | (6.0) | Adjustments to LIFO inventories | | 39.8 | | 0.2 | | 39.8 | | 0.2 | Other adjustments | | 5.2 | | 0.4 | | 5.2 | | 0.4 | Adjusted EBITDA(1) | | 878.1 | | 441.6 | | 878.1 | | 441.6 | Additional Segment Adjusted EBITDA Adjustments(2):
| | | | | | | | | Industrial Technologies & Services | | $40.3 | | $424.8 | | $40.3 | | $424.8 | Precision & Science Technologies | | 20.4 | | 140.2 | | 20.4 | | 140.2 | Incremental corporate expenses not allocated to segments | | (4.9) | | (46.4) | | (4.9) | | (46.4) | Supplemental Adjusted EBITDA | | 933.9 | | 960.2 | | 933.9 | | 960.2 |
(1)
| These amounts are reported in accordance with US GAAP and have not been adjusted to reflect the pro forma impact of a full quarter of the newly combined Ingersoll Rand. |
(2)
| These “Additional Segment Adjusted EBITDA Adjustments” represent the impact of two months (January and February of 2020) of standalone legacy Ingersoll Rand Industrial Segment activity in the twelve month period ended December 31, 2020 and a full year of standalone legacy Ingersoll Rand Industrial Segment activity in the twelve month period ended December 31, 2019. The incremental corporate expenses not allocated to segments represent additional corporate expenses incurred by the Company to operate the newly combined Ingersoll Rand. |
TABLE OF CONTENTS INGERSOLL RAND INC. AND SUBSIDIARIES
UNAUDITED SUPPLEMENTAL ADJUSTED COMBINED FINANCIAL INFORMATION
RECONCILIATION OF GAAP DILUTED EARNINGS PER SHARE TO
SUPPLEMENTAL ADJUSTED DILUTED EARNINGS PER SHARE
(Unaudited; in millions, except per share amounts) Diluted Loss Per Share (GAAP) | | | $(0.09) | Diluted Earnings Per Share from Discontinued Operations (GAAP) | | | 0.06 | Diluted Loss Per Share from Continuing Operations (GAAP) | | | (0.15) | Plus: | | | | Effect of transaction(1) | | | 0.01 | Legacy Ingersoll Rand Industrial Segment's earnings(2) | | | 0.13 | Interest expense | | | 0.26 | Provision for income taxes | | | 0.03 | Depreciation expense | | | 0.18 | Amortization expense | | | 0.79 | Impairment of intangible assets | | | 0.05 | Restructuring and related business transformation costs | | | 0.21 | Acquisition related expenses and non-cash charges | | | 0.43 | Stock-based compensation | | | 0.11 | Foreign currency transaction losses, net | | | 0.04 | Shareholder litigation settlement recoveries | | | 0.09 | Other adjustments | | | 0.03 | Minus:
| | | | Adjusted interest expense | | | 0.28 | Adjusted income tax provision, as adjusted | | | 0.42 | Adjusted depreciation expense | | | 0.20 | Adjusted amortization of non-acquisition related intangible assets | | | 0.03 | Supplemental Adjusted Diluted Earnings Per Share | | | $1.28 | Supplemental Adjusted Diluted Shares Outstanding | | | 422.5 |
(1)
| This amount represents the impact of adjusting the GAAP weighted average shares outstanding for the period by the additional shares outstanding as if the acquisition of the Ingersoll Rand Industrial Segment was in effect for the entirety of the twelve month periods ended December 31, 2020. |
(2)
| The “Legacy Ingersoll Rand Industrial Segment's earnings” represent the impact of two months (January and February of 2020) of standalone legacy Ingersoll Rand Industrial Segment activity in the twelve month period ended December 31, 2020. This line is inclusive of incremental corporate expenses not allocated to segments which represent additional corporate expenses incurred by the Company to operate the combined Ingersoll Rand. |
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